Conspiring Doctor Loses $420K Restitution Appeal

By George Khoury, Esq. on July 26, 2018 | Last updated on March 21, 2019

When doctors and other professionals conspire, the law can be rather unforgiving. Just ask the Minnesota doctor who just lost her appeal of the $400K+ restitution order stemming from an illegal kickback scheme with a pharmacy.

Though the doc was getting less than $1K per referral, and was only convicted of making 20 or so referrals, after entering her plea, she was ordered to pay restitution for the entire sum the pharmacy defrauded from the U.S. government. Given the massive (20X) difference between the restitution order and her supposed illicit gains, an appeal followed.

Compounding Conspiracy

The basic scheme behind the doc's conspiracy involved receiving a $660 kickback for every patient she referred to a particular compounding pharmacy. The pharmacy would then submit fraudulent claims to Medicaid and Medicare by claiming that the compounding formulation, to make a specific pain-relief cream that the doc would prescribe, used more expensive ingredients than the pharmacists were actually using. Basically, the pharmacy reported using an individual dosage component, when in actuality it was using a bulk component.

The doc tried to argue on appeal that the restitution order was not commensurate with her level of involvement and was disproportionate to her own illicit gains. However, as the record reflected and the Eighth Circuit explained, the doctor was well aware of how the pharmacy's scheme worked, and was actively involved because she wrote the prescriptions the pharmacy needed to continue the kickback scheme.

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