Healthcare Facility Rx Drug Diversion – Medically Unnecessary Prescriptions
United States Attorney Roger B. Handberg announces that pain management physician Edward Lubin has agreed to pay the United States $1.5 million to resolve allegations that he violated the False Claims Act (FCA) by causing the submission of claims for fentanyl prescriptions that were written in exchange for kickback payments and that were medically unnecessary. The agreement resolves the United States’ claims against Dr. Lubin under the FCA. The claims resolved by the settlement are allegations only, and there has been no admission or determination of liability.
The allegations in the complaint and the conduct covered by the settlement agreement relate to the submission of claims for a fentanyl-spray medication known as Subsys, which was manufactured by Insys Therapeutics, Inc. (Insys). According to the complaint, the United States alleges that Dr. Lubin knowingly and willfully accepted approximately $159,580 in kickback payments from Insys in return for prescribing Subsys. The settlement figure is almost 10 times the amount that Dr. Lubin received in kickbacks.
The United States alleges that once Dr. Lubin became involved with Insys, he immediately began prescribing Subsys in exchange for kickbacks and regardless of medical necessity. The United States contends that the kickbacks paid to Dr. Lubin were disguised as payment for speaking at sham “events” that lasted a few minutes, never occurred, or had repeat attendees despite the lack of any reason to present the same information multiple times to the same individuals. According to court documents filed by the United States, Dr. Lubin allegedly caused more than 400 false claims for Subsys to be submitted to the Medicare and TRICARE programs, in violation of the federal Anti-Kickback Statute (AKS) and the FCA, which paid in excess of $4 million for these claims.
In 2019, Insys was prosecuted under a criminal information filed in the District of Massachusetts in a case captioned United States v. Insys Therapeutics, Inc., Case No. 1:19-cr-10191-RWZ. Pursuant to the terms of a deferred prosecution agreement, Insys’s wholly owned subsidiary, Insys Pharma, Inc., pleaded guilty to five counts of mail fraud in connection with a scheme to defraud patients and insurers, including Medicare. In its deferred prosecution agreement, Insys admitted that bribes paid to medical practitioners through its speaker program were used to induce practitioners to write increasing amounts of medically unnecessary Subsys prescriptions in exchange for the payment of speaker fees. To date, in addition to the company, at least fifteen doctors, seven former Insys executives, and seven former Insys sales representatives have been criminally convicted for their roles in Insys’s sham speaker program.
“The United States will not be thwarted in its efforts to hold doctors like Dr. Lubin accountable for issuing medically unnecessary prescriptions tainted by kickbacks,” said U.S. Attorney for the Middle District of Florida Roger B. Handberg. “We thank our skilled law enforcement partners for their determined efforts to investigate this important case and to make Dr. Lubin face responsibility for his unlawful actions.”
“Providers who defraud federal health care programs deplete the Medicare trust fund, potentially negatively impacting their patients and all Medicare program participants,” said Stephen Mahmood, Acting Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to protecting the integrity of the Medicare program and the people it serves. We will continue to investigate alleged health care fraud schemes, including those involving kickback payments and fraudulent claims in violation of the False Claims Act.”
“The Defense Health Agency is incredibly grateful for the willingness and time spent by the government to take this matter to court, which resulted in settlement terms highly favorable to the government and, by extension, to our agency,” said Lieutenant General Telita Crosland, Director of the Defense Health Agency (DHA) of the United States Department of Defense. “The efforts of the Department of Justice in cooperation with the DHA in FCA actions are noteworthy and allow our agency to recoup improperly claimed funds for the benefit of TRICARE beneficiaries.”
The FCA imposes liability on any person or entity that submits, or causes the submission, of false claims for payment to federal payors. Among other grounds, falsity under the FCA may be established based on claims tainted by kickback payments due to violations of the AKS, as well as claims submitted for medically unnecessary goods or services. The United States’ settlement of this matter illustrates its continued efforts to combat health care fraud using one of its most powerful civil enforcement tools, the FCA. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The resolution obtained in this case was the result of a coordinated effort by the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Department of Health and Human Services’ Office of Inspector General, and the Defense Criminal Investigative Service, the criminal investigative arm of the U.S. Department of Defense’s Office of Inspector General. The FCA case was litigated by Assistant United States Attorneys Jeremy R. Bloor, Kelley Howard-Allen, and Soma Nwokolo. Assistant United States Attorney Christopher Emden litigated Dr. Lubin’s bankruptcy case for the United States.
The settlement agreement, which Dr. Lubin’s counsel filed in bankruptcy court today pursuant to a bankruptcy petition previously filed by Dr. Lubin, is available below.
Pursuant to the terms of the settlement, the bankruptcy court has final approval over the settlement agreement. The FCA case against Dr. Lubin is captioned United States v. Lubin, Case No.8:21-cv-2231.
