Two Sentenced for Healthcare Fraud Scheme Targeting Military

A former South Florida pharmacy executive was sentenced to seven and a half years in prison for defrauding Tricare and CHAMPVA of approximately $88 million through a compounding pharmacy fraud scheme.  Tricare and CHAMPVA are the health care benefit programs for the United States Department of Defense and Department of Veterans Affairs. His executive assistant received a sentence of five years imprisonment for her role in the conspiracy

Miami prosecutors have charged two former employees with Pompano Beach-based Patient Care America with bilking $87 million from a military healthcare program run by the U.S. Department of Defense. The alleged scheme included patient referrals that Grow and several others steered to them through marketing companies over a one-year span, according to court records. Matthew Smith, a pharmacist and former vice president of PCA, and Alisa Catoggio, a pharmacy technician, were charged in late April with conspiring to commit healthcare fraud by submitting bogus claims for prescribed drugs to the federal Tricare program for thousands of military service members and veterans who didn’t need them. The former PCA employees are accused of mixing ingredients to create expensive pain creams to treat the scars of military personnel with questionable prescriptions who were not charged any co-payments for the drugs.

The former football player, who owned a marketing firm, used telemedicine companies to prescribe the compound medications, paying them approximately $100 per telephone or video consultation. Grow and his associates filled out prescription forms, faxed them to telemedicine companies for signing by a doctor, and then sent them to the pharmacy. According to court records, a pain cream prescription that costs the PCA pharmacy about $700 to fill could be reimbursed by Tricare for $16,000. Grow and his team of recruiters received $7,000 in commissions each time. Of the $87 million that the PCA pharmacy collected from Tricare between 2014 and 2015, about half was kicked back to Grow, his team of associates and other companies for the patient referrals. In addition to healthcare fraud, both Smith and Catoggio are accused of paying and receiving healthcare kickbacks.

The Pompano Beach pharmacy business has been mired in controversy over kickback allegations involving the Tricare program for several years. In 2019, Patient Care America, CEO Patrick Smith and and pharmacist Matthew Smith, the former vice president of operations, agreed to settle a False Claims Act case with the Justice Department. PCA, along with a private equity firm, paid $21 million; Patrick Smith paid $300,000; and Matthew Smith paid $12,788. The payments resolving the civil case were based on the ability to pay, according to the Justice Department. Patrick Smith, the CEO, was not charged criminally. But Matthew Smith, along with his assistant, Catoggio, were charged in the criminal case, which began with the prosecution of Grow and several others.