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Alabama Pharmacy Owners and Employees Indicted in $200 Million Medicaid Fraud Involving Medically Unnecessary Prescriptions

A nurse, the owners, and several employees of Alabama-based Northside Pharmacy have been charged in a $200-million prescription drug fraud case. A DOJ investigation into the alleged scheme has resulted in a 103-count indictment. The pharmacy is located in Haleyville and operates as Global Compounding Pharmacy. The company has described itself as “one of the top three largest compounding pharmacies in the United States.”  

Alabama Pharmacy Owners and Employees Indicted in $200 Million Medicaid Fraud Involving Medically Unnecessary Prescriptions

In one of the most egregious instances of overbilling cited by prosecutors, the pharmacy allegedly billed a healthcare plan $29,000 for a single container of cream used to treat general wounds.

The indicted individuals include John J. Adams, owner and president of Northside Pharmacy (38 counts); Ashley Adams, the company’s HR director (10 counts); Jeffrey Black, owner, VP, and COO (18 counts); James A. Mays, III, pharmacist (20 counts); Jessica Linton, billing team manager (24 counts); Lisa Holmes, sales rep. supervisor (12 counts); John Gladden, district manager (9 counts); Christi Cunningham, sales rep. (9 counts); Juan Rodriguez, biller (6 counts); and Lori D. Edenfield, nurse practitioner, (32 counts).

Global Compounding Pharmacy compounded drugs at its Haleyville facility but processed orders at a customer service center in Florida, where many of the defendants were based. Global’s sales representatives, who were in charge of generating prescriptions, worked in various states.   

According to the indictment, Global engaged in “multi-faceted healthcare fraud,” defrauding Medicaid, Medicare, TRICARE, and other healthcare plans. Global allegedly offered kickbacks in exchange for medically unnecessary prescriptions, directed employees to alter prescriptions by adding high-cost drugs, and induced automatically refills, sometimes over 10 times.

Prosecutors claim Global routinely discounted copays and billed third parties for drugs without patients’ knowledge, often mailing them to the home of the pharmacy’s owner. As a result of its fraudulent activities, Global billed government healthcare plans $200 million, collecting about $50 million.

From recruiting patients with high-reimbursement plans to billing the government for feminine creams prescribed to male patients and for adult-use creams issued to children, the alleged misconduct included a variety of unethical and lucrative practices.

Some of the alleged violations include identity theft, anti-kickback violations, and conspiracy to commit fraud. The defendants used proceeds from the scheme to purchase private jet travel and luxury watches.

A spokesperson for the Department of Defense commented, “The egregious corruption uncovered in this complex and wide-ranging fraud scheme wasted millions of dollars in American taxpayer funds, and furthermore, deprived U.S. military members and their families of legitimate prescription medications and other needed medical care. Through our aggressive investigative efforts with our partner agencies, DCIS helped stop this shameful abuse of one of DoD’s most critical programs.”

According to one of the HHS Office of Inspector General agents involved in the investigation, “This audacious multimillion-dollar fraud scheme posed a significant threat to the integrity of government healthcare programs at the expense of taxpayers.” The Special Agent added that the OIG and its law enforcement partners “will continue to protect Medicare and Medicaid from such costly scams.”

The indicted individuals may face up to 20-year prison sentences and multi-million-dollar fines.

If you know of a healthcare provider or company that is cheating its patients, call us. We can assist you in putting an end to the fraud and help you receive a large cash reward for your trouble. Connect with us 888.742.7248 or ONLINE.

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