As many fraudsters throughout the United States have proven, there is a lot of money to be made through health care fraud scams. The problem, of course, is that a large number of these perpetrators get caught. We’re pleased to be able to continually report about the latter. In no way is the defrauding of our nation’s health insurance programs acceptable. 51 year-old, Jeffrey Pearlman of Edgewood, New Jersey is about to learn that the hard way.
As the District of Connecticut branch of the United States Department of Justice reported yesterday, Pearlman has pleaded guilty for his role in a kickback scheme that defrauded a number of federal health care programs. According to court documents, he was employed by Arizona-based Insys Therapeutics between September 2012 and November 2015. During that time, Pearlman initiated a “Speaker Programs” sham to boost sales of the drug, Subsys.
Subsys is designed to assist cancer patients with their pain.
Subsys, as the DOJ explains is “a fentanyl-based sublingual spray that was approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients.” Pearlman was first a sales representative and later a District Sales Manager at Insys Therapeutics. As part of his managing duties, he oversaw sales reps who called licensed health care providers in Connecticut, New York, New Jersey and Rhode Island.
Pearlman’s “Speaker Programs” scheme started with having his representatives coerce particular doctors and their assistants and advanced practice registered nurses (APRNs) to prescribe Subsys to their patients. As an incentive, these medical professionals would be paid to participate in a number of events known as “Speaker Programs”. At these events, which were generally held in high-end restaurants, the physicians, assistants and nurses were to be educated about the drug.
The “Speaker Programs” were no more than dinners with friends.
“In truth, the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe Subsys, and no educational component took place,” explains the Department of Justice report, “’Speakers’ were paid a fee that ranged from $1,000 to several thousand dollars for attending these dinners.” At one particular dinner in 2013, Pearlman paid a Connecticut healthcare provider a speaker fee even though no other healthcare professionals were present. There wasn’t even a presentation of Subsys at the event.
The report goes on to explain that Pearlman later met with the same Connecticut healthcare provider and offered the individual more “Speaker Programs” engagements in return for increased prescriptions of Subsys to patients. When the increase in prescriptions didn’t take place, Pearlman emailed the Insys sales representative responsible for calling on the provider and communicated a threat to withdraw his promise of more “Speaker Programs” for the provider.
“As a result of this scheme, Medicare Part D plans authorized payment for nearly 400 Subsys prescriptions made by the Connecticut healthcare provider, causing millions of dollars of losses,” explains the DOJ, “Pearlman personally profited from this scheme through inflated quarterly bonuses he received that were based in large part on the sales results of the sales representatives he managed.”
In clear violation of the anti-kickback law (an offense that carries a maximum term of imprisonment of five years and a fine of up to $250,000), Pearlman entered his guilty plea before U.S. District Judge Janet Bond Arterton in New Haven yesterday. Currently released on a $200,000 bond, Pearlman’s sentencing is scheduled for October 31, 2018.
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