Doctors plead guilty in health care fraud scheme - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Doctors plead guilty in health care fraud scheme

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SAN DIEGO (CNS) - Two Tennessee doctors pleaded guilty in San Diego federal court Wednesday to participating in a health care fraud scheme that bilked TRICARE -- the health care program that covers United States service members -- out of more than $65 million by prescribing thousands of exorbitantly expensive compounded medications to patients that they never saw or examined.

Drs. Carl Lindblad, 53, and Susan Vergot, 31, pleaded guilty to conspiracy to commit health care fraud. Sentencing is set for June 29 before U.S. District Judge Janis Sammartino.

According to court documents, a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents -- all TRICARE beneficiaries -- to obtain compounded medications that would be paid for by TRICARE. The information was sent to Choice MD, the Tennessee medical clinic that employed Lindblad and Vergot.

Lindblad and Vergot then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person. Once signed by the doctors, those prescriptions were not given to the beneficiaries, but were sent directly to particular pharmacies controlled by co-conspirators that filled the prescriptions and billed TRICARE at exorbitant prices, according to the U.S. Attorney's Office.

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration, they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.

Josh Morgan, a former Marine from San Diego, pleaded guilty last month to conspiracy to commit health care fraud for his role in recruiting TRICARE beneficiaries to fraudulently receive prescriptions.

Between December 2014 and May 9, 2015 -- the day that TRICARE stopped reimbursing for compounded medications -- Lindblad and Vergot authorized 4,442 total prescriptions. Over that time, their co-conspirators billed TRICARE $65,679,512 for those prescriptions.

Lindblad and Vergot were the fifth and sixth defendants to be charged in the fraud case. In addition to Morgan, Jimmy and Ashley Collins, the owners of Choice MD, and CFK Inc., the owner of a co-conspirator pharmacy, were indicted last month on charges of conspiracy to commit health care fraud and illegal payments of remunerations. That case remains pending.

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