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[pezdispenser]

DO NOT FOLLOW THIS GUY'S ADVICE.

Hiring a marketing company and paying kickbacks to sales reps, doctors and patients for compounding prescriptions is illegal.

Pharmacist Pleads Guilty To Conspiracy To Pay Healthcare Kickbacks

Pharmacist Pleads Guilty To Conspiracy To Pay Healthcare Kickbacks
Tampa, FL – Acting United States Attorney W. Stephen Muldrow announces that Carlos Mazariegos (40, St. Petersburg) has pleaded guilty to conspiracy to commit healthcare fraud. He faces a maximum penalty of five years in federal prison.

According to court documents, Mazariegos was a licensed pharmacist who co-owned Lifecare Pharmacy in Pinellas County with his business partner, Benjamin Nundy. In 2014, Mazariegos, Nundy, and Dr. Anthony Baldizzi, a licensed physician, agreed that Lifecare would pay Baldizzi illegal kickbacks for prescriptions of compounded medications written by Baldizzi and filled at Lifecare. In May 2014, Mazariegos, acting on behalf of Lifecare, entered into a marketing agreement with Centurion Compounding Inc., a marketing firm located in Pasco County that employed sales representatives to market compounded medications, specifically creams for pain and scars, to beneficiaries of health care plans, especially TRICARE. These compounded creams typically ranged in price from approximately $900 to $21,000 for a one-month supply.

Between May and November 2014, Centurion directed patients that it had recruited and the physicians within its network to send all of their compounded creams prescriptions to Centurion. Centurion then transmitted these prescriptions to Lifecare to be filled. Mazariegos, Nundy, and the principals of Centurion agreed to pay illegal kickbacks to Baldizzi equal to approximately 10% of the after-cost amount of each claim paid by TRICARE and other health care benefit programs as a result of compounded medications prescriptions written by Baldizzi and filled by Lifecare, for Centurion-recruited patients. For example, in December 2014, Mazariegos wrote a check to a car dealership for $71,900, funded with the proceeds from the operation of Lifecare, to pay for a BMW for Baldizzi in partial satisfaction of the kickbacks owed to him.

Lifecare received approximately $5.3 million from TRICARE for claims made for compounded medications prescribed by Baldizzi resulting from this illegal kickback relationship. Mazariegos and Nundy also billed Medicare $1,064,729 for compounded medications that Lifecare made with bulk powder ingredients when they knew that Medicare only reimbursed for such medications when they were made using crushed tablets.

Nundy is scheduled to plead guilty to engaging in a conspiracy to commit healthcare fraud at a hearing on April 26, 2017.

A grand jury returned an indictment charging Baldizzi with conspiracy, healthcare fraud, receiving health care kickbacks, and engaging in illegal monetary transactions. The case is currently set for trial in May 2017.

This case was investigated by the Federal Bureau of Investigation, the U.S. Department Health and Human Services - Office of Inspector General, the Defense Investigative Service, the U.S. Air Force Office of Special Investigation, and the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorneys Mandy Riedel and Megan Kistler.

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[BMBiology]

A feel good story in SDN turned out to be fraudulent.


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[Momus]

5.3M only? Damn that's pretty weak for such conspiracy and fraud... I hope he defrauded insurance more coz honestly, 5.3M divided by 4-5 people + some prison time doesn't seem to be worth it.

 

[Old]

5.3M only? Damn that's pretty weak for such conspiracy and fraud... I hope he defrauded insurance more coz honestly, 5.3M divided by 4-5 people + some prison time doesn't seem to be worth it.

I wonder what the financial penalty will be? Those numbers don't match up to his huge income claims of the past. I think he is listed as being the owner of about 10 LLC's of buisnesses and real estate holdings. What they derived from 5.3 million after the payoffs would not have paid for all those exotic cars let alone all the other holdings. Maybe there was something else really "special" in those compounds. Maybe some special "Miami Vice" compounds were involved?

Personally, I think we deserve an apology from him. All the made up success stories and leading a lot of new grads down the wrong path with the fabricated stories of success. Maybe its time he acts like a professional.

 

[Lnsean]

5.3M only? Damn that's pretty weak for such conspiracy and fraud... I hope he defrauded insurance more coz honestly, 5.3M divided by 4-5 people + some prison time doesn't seem to be worth it.

that's only 5.3M and it's only revenues....profits after everything probably 2-3M...divide that by 4-5 people..you're looking at like what? 500k each? Definitely not worth it. I think the main thing was that they were caught early...instead of like 5-10 years out.

 

[Old]

that's only 5.3M and it's only revenues....profits after everything probably 2-3M...divide that by 4-5 people..you're looking at like what? 500k each? Definitely not worth it. I think the main thing was that they were caught early...instead of like 5-10 years out.

500k would not buy even one of those cars that he rents out. Not to mention all the other properties and buisnesses he owns. Where did the rest of the $ come from? Must be more involved.

 

[lord999]

that's only 5.3M and it's only revenues....profits after everything probably 2-3M...divide that by 4-5 people..you're looking at like what? 500k each? Definitely not worth it. I think the main thing was that they were caught early...instead of like 5-10 years out.

It's quite a bit more than that, but since there's federal preemption, the federal claims goes before the others. There's something like treble damages involved for insurance fraud. This is just the outright criminal element (so the $5M figure is just for the FSG lookup) and only contains the federal jurisdiction matters (defrauding TriCare and possibly CMS only). Express Scripts and CVS/Caremark will pursue theirs separately through civil.

What annoys me is that they only got 5 years on this guy. I guess it's a plea and it's a true Felony, but it still sucks. I'm sure he'll get Club Fed rather than Gen Pop.

 

[owlegrad]

How much time do you think is fair? It's not like he killed people or sold marijuana or did something really outrageous.

 

[lord999]

How much time do you think is fair? It's not like he killed people or sold marijuana or did something really outrageous.

This is old, but the guidelines are fairly similar every year.
http://www.ussc.gov/sites/default/files/pdf/guidelines-manual/2015/Sentencing_Table.pdf
http://www.ussc.gov/sites/default/files/pdf/guidelines-manual/2015/2B1.1.pdf

Unless Dr. M had something major as a prior offense, he's a Category I offender (lower on the initial sentencing).

I would think the prosecution used 24 (51-63 months) as the score as Dr. M definitely got the b16 score adjustment.

I'd say he should have scored a minimum of 24 but could have been a 31 (108 months) or if the judge decided it was especially problematic (I doubt it) then 35 (168 months):
1
a. 7
b.
1j. 18
2.
b. 4
7.
b1. 2
16.
a. 2 - Not scored due to b2b
b. 4 - Not scored due to b2b


I think he fairly merited the 31 but luckily plead to a 24. Since any state offenses would be concurrent, that's the maximum jail time, and considering the level of fraud involved, that's a fairly light sentence considering the judicial delay.

Don't cheat the government, especially the DoD. And no, while it's not a violent crime, but that's enough money for a career lifetime for even one of us (if we actually work the entire time). That is not chump change, even for a PBM.

The Feds are less severe for non-violent crime, and I accept that (look at local state situations with fraud or non-violent theft and the sentences are extremely variable). That said, compared to some others who ran afoul of DoD (who tend to be lazy and flush in terms of contract money), he got off lightly.

 

[Its Z]

Was he sentenced to 5 years? Or is 5 years max term for this violation?

What exactly was his crime? Kick back to physician and charging $20,000 for cream? I say charge as much as they're willing to pay as PBM and govt receive kickbacks from pharma all day long.

It doesn't seem that bad to me. I hope he gets off with a probation only. Considering with the felony conviction, he will never practice pharmacy again.

Hang in there M.

 

[MountainPharmD]

He started out good. He's one of the reasons I decided to pursue independent ownership.
.
In my opinion this is an example of the little guy getting pinched for doing the exact same type of things the big guys are doing.
.
How is this any different than Humana giving patients a $0 copay on certain meds if they use their own mail order pharmacy?
.
Or Caremark requiring a pharmaceutical company to pay them money to include their expensive brand name drug on their formulary.

 

[lord999]

He started out good. He's one of the reasons I decided to pursue independent ownership.
.
In my opinion this is an example of the little guy getting pinched for doing the exact same type of things the big guys are doing.
.
How is this any different than Humana giving patients a $0 copay on certain meds if they use their own mail order pharmacy?
.
Or Caremark requiring a pharmaceutical company to pay them money to include their expensive brand name drug on their formulary.

Max 5 years. At least 3 years and change from the FSG.

Because it's openly apparent to the actual buyer and seller what the deal is and Stark/Stark II laws specifically prohibit that sort of closed marketing behavior for a prescriber captured situation (and it does except within a Medicare authorized facility aka hospital or an HMO from that rule if the prescriber is an employee or exclusive provider). Since Tricare is a third party, it has no control over what sort of cost overruns a provider may do. Tricare signs those contracts in good faith that the providers follow the network issues, and unlike Humana and Caremark, have two exceptions.
1: If a TriCare beneficiary actually is that costly, it's no difference to the Tricare Management Authority unlike the pre-Obamacare days where there were actual coverage limits.
2: TriCare is a government entity. So, it cuts both ways. Tricare is sued as a government entity (which is far easier than a private company), but in turn, can go after their contracts under criminal matters and not civil.

If Doctor M just screwed over PBMs, I doubt that it'd go this far as like you point out, PBM's do this to each other (ABC's merger came about because Amerisource pissed off one too many customers with efficient breach of contracts at really annoying times and had to buy Bergen to avoid being put on the exclusionary list). However, he chose to go after TriCare, which they do figure it out sooner or later. I'm sure San Antonio PEC was real thrilled when they saw the analysis of the cost outliers. If you're going to have to defraud someone, try not to go after the Feds. We're pretty stupid, I know, but we're not in it for the money.

 

[Old Timer]

This thread is an example of many ugly things. It's one of the saddest things I have read in along time. The utter joy people have in kicking someone when they are down is mind boggling to me. Doctor M started out and built a business. Then like many people he succumbed to greed. He flew high and lived large and will now pay the price. It's a cautionary tale. I take no pleasure in his suffering. He lost his family, his livelihood, a great deal of money, his reputation and shortly his personal freedom. I find it sad. His life will never be the same.

When you worship money and things you lose sight of the most precious thing in this life, time. It's limited and it's priceless. Once gone, it can never be recovered. Our societal fetish to value things over time is amazing to me.

 

[Old]

This thread is an example of many ugly things. It's one of the saddest things I have read in along time. The utter joy people have in kicking someone when they are down is mind boggling to me. Doctor M started out and built a business. Then like many people he succumbed to greed. He flew high and lived large and will now pay the price. It's a cautionary tale. I take no pleasure in his suffering. He lost his family, his livelihood, a great deal of money, his reputation and shortly his personal freedom. I find it sad. His life will never be the same.

When you worship money and things you lose sight of the most precious thing in this life, time. It's limited and it's priceless. Once gone, it can never be recovered. Our societal fetish to value things over time is amazing to me.

I agree with some of what you have said. I don't know that anyone feels any pleasure in his situation. Personally my biggest problem was the gloating and stories that he told about his rapid success to fame and fortune in his 1000 sq ft store. I am not sure they ever built a legitimate business. As a professional you know that kick backs arrangements are illegal. A new grad could tell you that. It sounds like other issues were glaringly illegal which he, his partner, you, I and everyone else here knows was and is wrong.

There are several people here who have opened and operated legitimate pharmacies on this forum. They grind it out, are successful and kudos to them.

However, if you do illegal things to prosper that is your problem and your choice. You know if you get caught you pay the price.
so, I don't know that I feel sorry for him. He knowingly made the choices that he did. I don't feel bad for bank robbers or drug dealers. Do the crime , do the time. But, posting on a professional forum and gloating about how you made what everyone else here would have to work 40 lifetimes to earn as much while you are committing felonies to get there is wrong no matter how you slice it up. Perhaps, to make us feel a little smaller and less important then he perceived he was. I can never figure out what people are thinking about that do this type of thing. So, I really don't feel sorry for them.

I do agree time is precious and seems to be more fleeting as we grow older.

 

[Sparda29]

How much time do you think is fair? It's not like he killed people or sold marijuana or did something really outrageous.

Selling marijuana shouldn't be illegal.

 

[owlegrad]

Selling marijuana shouldn't be illegal.

I am at least reasonably certain I was being facetious likening it to murder. But perhaps you realized that and just had to post anyway.

 

[CetiAlphaFive]

This thread is an example of many ugly things. It's one of the saddest things I have read in along time. The utter joy people have in kicking someone when they are down is mind boggling to me. Doctor M started out and built a business. Then like many people he succumbed to greed. He flew high and lived large and will now pay the price. It's a cautionary tale. I take no pleasure in his suffering. He lost his family, his livelihood, a great deal of money, his reputation and shortly his personal freedom. I find it sad. His life will never be the same.

When you worship money and things you lose sight of the most precious thing in this life, time. It's limited and it's priceless. Once gone, it can never be recovered. Our societal fetish to value things over time is amazing to me.

The posts you and Its Z made are just hand waiving based on your perceived connection to Doctor M.

If an 89 year old lady with no family has saved $10 in cash every day for the last 80 years, and I steal that money from her, what have I actually done?
In our society, money is the tangible avatar of time. To say "why would anyone value money over time" is just a paper thin excuse to satisfy the conflicting emotions you feel.
That's like saying someone's a fool for valuing potable water over breathable air.

I'm going to agree with the others in this thread and speculate that there's more to it than meets the eye.

 

[Lnsean]

He started out good. He's one of the reasons I decided to pursue independent ownership.
.
In my opinion this is an example of the little guy getting pinched for doing the exact same type of things the big guys are doing.
.
How is this any different than Humana giving patients a $0 copay on certain meds if they use their own mail order pharmacy?
.
Or Caremark requiring a pharmaceutical company to pay them money to include their expensive brand name drug on their formulary.

meh

 

[BMBiology]

Let's face it...people like to see others succeed, just as long as they are not more successful than them.

We love to see successful people fall on their face. Maybe it makes us feel better? Maybe we can then say we didn't miss out an opportunity? Who knows...that is just the way we are.

I get jealous too but I have learned how to let it go. Instead of getting all jealous, I really like to talk to successful people and learn from them. They have made. They have a story to tell. I am all ears.

I must admit tho...it is rather sad to see all of these people kissing his butt and congratulating him when he was riding high but when his fortune went down hill, these same people were mocking him.


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[samuricool]

I must admit tho...it is rather sad to see all of these people kissing his butt and congratulating him when he was riding high but when his fortune went down hill, these same people were mocking him.


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When you hear his story of success you expect that it is from doing it the right way - busting your butt with a little bit of luck. The people who mock him have every right to do so, he deceived everyone here. He tried to show off how great he was at making phat stacks. Turns out the only thing he was good at was making money illegally and leaving a trail to prove it.

Enjoy prison scum.


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[BMBiology]

When you hear his story of success you expect that it is from doing it the right way - busting your butt with a little bit of luck. The people who mock him have every right to do so, he deceived everyone here. He tried to show off how great he was at making phat stacks. Turns out the only thing he was good at was making money illegally and leaving a trail to prove it.

Enjoy prison scum.


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Fair enough especially if he somehow screwed you over and you went into independent pharmacy because of his lies.

Yeah he was gloating but this is an anonymous forum. I read about how some guy made it big almost every day. Lies or not, what is the big deal? This is the internet after all. You should take every thing with a grain of salt.


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[BMBiology]

Remember he got involved in this kick back scam in 2014. He started his business in 2010 so you can say he had some success before he got too greedy.

If anything, this is a cautionary tale. We, including myself of course, should learn from his downfall.

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[Old Timer]

Remember he got involved in this kick back scam in 2014. He started his business in 2010 so you can say he had some success before he got too greedy.

If anything, this is a cautionary tale. We, including myself of course, should learn from his downfall.

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That's the obvious point. He was doing well but he wanted to do great and succumbed to greed. If you read the posts, he started wit nothing and got to about 750 scripts per week. You can make some nice coin if you work hard and manage well. But you don't drive zillion dollar cars that way I'm not condoning what he did. It was clearly immoral, unethical and unfortunately for him illegal. But I feel said for him, not anger towards him......

 

[lord999]

I guess I'm different. I do feel anger at him about this, and I still think his sentence was light. It's actually not for the fraud directly (though it still sucks), it's for the additional bureaucratic layers of control imposed on both oversight and on others after some jackass like this exploits something. It takes ages to get Office of Legal Counsel to do anything, but when something like this happens, we have to come together and write these awful rules that make life harder on all the honest pharmacists doing patients a favor by custom compounding this.

To give a different perspective on the follow on effect, I loathe this guy:
Richard Reid - Wikipedia

Yeah, sure, he tried to kill a bunch of people. But as a practical matter, I hate this a$$hole because he is the reason why we have to talk off our shoes at the airport (and I don't care, but when some 80 yo clearly not a terrorist old lady spends 5 minutes hunched over dealing with the pinhead TSA agent who is making her remove her shoes to prove what everyone else in line knows that she's an 80 yo lady just trying to fly somewhere.

It's not the crime that pisses me off as much as how much harder it is for honest people to make a good living doing specialty work that just can't be done in manufacturing and get paid reasonably for it. Doctor M just screwed up a good deal and has caused and will cause more oversight to a lot of reasonable people. That's the real aftereffect of white collar crime that kills us by a thousand cuts.

So anyone wanting to help some TriCare patients get customized medicines due to a specific patient care factor? Well, good luck getting paid for the effort and surviving the new audit process for reimbursement.

 

[BidingMyTime]

I must admit tho...it is rather sad to see all of these people kissing his butt and congratulating him when he was riding high but when his fortune went down hill, these same people were mocking him.

This shouldn't be suprising, it's like a scorned spouse. The person who trusted the most, will fell like the biggest fool, and will lash out the most at the betrayer.

That said, I really don't see anyone mocking him here. I see people who are upset that they were lied to, and who want to make sure the truth is available for people who zombify this thread 15 years from now.

 

[ExpressMaiL]

What the hell did I miss?