Drug Compounders Target TRICARE

TRICARE is the Department of Defense’s health insurance program for members of our military services, veterans, and their families. Because it offers generous benefits, drug compounders target TRICARE beneficiaries for expensive medications.

We all hear a lot about the abuse of the Medicare and Medicaid systems, as the federal government struggles to contain health care fraud.  We hear less about the parallel problem of fraud against TRICARE.

But it’s the same sport.

Government reimbursement systems are, for the most part, honor systems.  And like all honor systems, they are easily gamed. Because claims are presumed valid and paid, and only chased later if determined to be improper (“pay and chase”), it’s an attractive world in which to do business for the ethically challenged.

This article, which appeared in the Wall Street Journal on November 9, 2015, is yet another example of how big the problem is and how important whistleblowers are to combating it.  It seems that drug compounders, about which we’ve written quite a lot on this blog, have targeted TRICARE beneficiaries because, according to the article, “the program was known to reimburse compounded drugs more generously than other federal health programs like Medicare.”

Talk about the cart leading the horse.  Instead of a patient-focused program (who out there needs our product?), these firms paid heavy bonuses to sales teams to target military members and their spouses because they knew TRICARE was more generous–or, shall we say, less alert to such scams.

A nickel here, a nickel there, this huge increase in compounding pharmacy prescriptions is the “primary driver” in the military’s $1.3 billion budget shortfall.  Ouch.  That’s a lot of compounding cream.

Thankfully, there are people drilling down on this problem, and it sounds like there will be more than civil damages sought.  Because of apparent kickbacks used in the promotion of the drugs, there may well be criminal indictments as well.

None of these efforts to stop the bleeding would have happened without whistleblowers coming forward and alerting law enforcement.  They are the ones risking their careers to set the record straight and get the problem fixed.  More power to them.