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BCBS of TN Defrauded $2M in $2B Telemedicine Insurance Scheme

BCBS of Tennessee was hit with fraudulent claims of $2 million as part of a larger telemedicine insurance scheme that filed over $2 billion false claims to payers.

BCBS was allgedly defrauded $174 million in a telemedicine fraud scheme

Source: Thinkstock

By Thomas Beaton

- BlueCross BlueShield (BCBS) of Tennessee has been named a damaged party after it was defrauded $2 million as part of a larger $2 billion telemedicine insurance scheme, according to the Department of Justice (DOJ).

The District Court for the Eastern District of Tennessee unsealed a 32-count indictment that alleges four individuals and seven healthcare companies attempted to commit healthcare fraud, mail fraud, and interstate commerce by falsifying prescriptions through a telemedicine provider. The fraud impacted private payers and targeted around $174 million dollars. 

HealthRight, a telemedicine company that operates in Pennsylvania and Florida, pleaded guilty to felony conspiracy for using the company to solicit information from consumers to file fraudulent prescription claims to doctors. HealthRight CEO Scott Roix also pleaded guilty to conspiracy charges.

Roix and HealthRight may also face additional wire fraud charges for using their telemarketing capabilities to fraudulently sell millions of dollars in weight-loss pills and skin creams.

The indictment says that HealthRight and the other named defendants fraudulently solicited insurance and prescription information from thousands of private payer beneficiaries about prescription pain creams and other similar products.

HealthRight and defendants used beneficiaries’ information to submit false claims to providers operating in the BCBS of Tennessee network and other private payer networks. The physicians approved prescriptions and were unaware that the defendants significantly increased the prices of these falsely prescribed drugs.

The companies then billed private insurers at extensive volumes, the indictment reads. Law enforcement officials estimate that the defendants billed no less than $931,000,000 to public and private healthcare payers between 2015 to 2018.

Additional defendants in the case include Andrew Assad of Palm Harbor, Peter Bolos of Lutz, and Michael Palso of Odessa, all residing in Florida. The three defendants owned pharmacies that were also indicted by the DOJ, which include Synergy Pharmacy Services and Precision Pharmacy Management. Larry Everett Smith, a co-defendant, also owned five pharmacies across Florida and Texas that participated in the alleged scheme.

The individual defendants in the case could face up to a total of 50 years in prison if convicted on each fraud and conspiracy charge and fines totaling $250,000. The companies involved may also face fines totaling $154,000,000.

HHS, the DOJ, and federal enforcement offices in Nashville, Florida, and Texas conducted the investigation. The US Attorney’s Office for the Eastern District of Kentucky coordinated the case and will prosecute in court proceedings.

The investigation continues DOJ and HHS efforts to combat significant healthcare fraud schemes that have led to billions of dollars in recovered funds for public payer programs. However, federal investigation of the telemedicine scheme also shows that law enforcement organizations are highly committed to stemming fraud in the private payer industry as well. 

Correction: An official from BlueCross BlueShield of Tennessee said that fraud schemes led to $2 million, not $174 million, in false billings. The $174 million affected hundreds of other commerical payers, according to Mary Danielson, director of corporate communications at BCBS of Tennesse.

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