This week, it was announced that a man from Northfield, New Jersey had admitted to defrauding New Jersey state health benefits programs and other insurers out of millions of dollars. The defendant did so by submitting fraudulent claims for medically unnecessary prescriptions. 40-year-old Michael Sher pleaded guilty to an information charging him with conspiracy to commit health care fraud.
From January of 2015 through April of 2016, Sher and others recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from a pharmacy out of the state. The conspirators were aware of the fact that certain compound medication prescriptions were reimbursed for thousands of dollars for a one-month supply.
They were also aware that New Jersey state, local government and education employees had insurance coverage for these medications. As referred to in the information, “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program and the School Employees’ Health Benefits Program. The Pharmacy Benefits Administrator paid prescription drug claims and then billed the state for the amounts paid.
Sher and his co-conspirators recruited public employees and others covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications. They often used pre-printed prescription forms and selected the medications with the highest possible reimbursement. The prescriptions were then faxed to the compounding pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
One of Sher’s conspirators was paid a percentage of each prescription filled by the pharmacy. The money was then distributed to Sher and other members of the scheme. Sher confessed to paying one of the doctors to reward another doctor for signing prescriptions. He also admitted to paying individuals covered by the Pharmacy Benefits Administrator.
The information presented concluded that the Pharmacy Benefits Administrator paid the Compounding Pharmacy more than $50 million for compounded medications mailed to individuals in New Jersey. $7,065,303 was for prescriptions submitted by Sher and his cohorts. Sher received roughly $1,728,372.29 for his involvement.
Sher is now scheduled to be sentenced on June 8, 2018. At the time of sentencing, the defendant will face a maximum penalty of ten years in prison. Additional details can be found here.