MS: Pharmacist Sentenced for $180 Million Health Care Fraud Scheme

Healthcare Facility Fraud – Distributing medically unnecessary compounded medications

A former Mississippi pharmacist was sentenced today to 10 years in the Southern District of Mississippi for a multimillion-dollar scheme to defraud TRICARE and private insurance companies by paying kickbacks to distributors for the referral of medically unnecessary prescriptions. The conduct resulted in more than $180 million in fraudulent billings, including more than $50 million paid by federal health care programs.

According to court documents, Mitchell “Chad” Barrett, 55, now of Gulf Breeze, Florida, and formerly of Mississippi, participated in a scheme to defraud TRICARE and other health care benefit programs by distributing medically unnecessary compounded medications. Barrett was licensed as a pharmacist in Mississippi and was a co-owner of various compounding pharmacies. As part of this scheme, Barrett adjusted prescription formulas to ensure the highest reimbursement without regard to medical necessity. He solicited recruiters to procure prescriptions for high-margin compounded medications and paid those recruiters commissions based on the percentage of reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE. He further routinely and systematically waived and/or reduced copayments to be paid by beneficiaries and members, and utilized a purported copayment assistance program to falsely make it appear as if his pharmacy and its affiliate compounding pharmacies had been collecting copayments.

Barrett pleaded guilty on Aug. 25, 2021, to conspiracy to engage in monetary transactions in criminally derived property. In addition to the term of imprisonment, Barrett was ordered to pay restitution and forfeit all assets traced to his ill-gotten gains.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Darren J. LaMarca for the Southern District of Mississippi; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Cyndy Bruce of the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DoD OIG-DCIS) Southeast Field Office made the announcement.

The FBI Jackson Field Office and DoD OIG-DCIS are investigating the case.

Trial Attorneys Emily Cohen and Alejandra Arias of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Kathlyn Van Buskirk of the Southern District of Mississippi are prosecuting the case with assistance from Sara Porter and Dustin Davis from the Criminal Division’s Fraud Section.

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National Association of Drug Diversion Investigators Federal Tax ID: 52-1660752 / DUNS Number: 073539913

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