Former pharma exec pleads guilty in $88M military healthcare fraud scheme

The former executive of a South Florida pharmacy, Matthew Smith, has pleaded guilty for his role in an $88 million scheme that defrauded Tricare and the Civilian Health and Medical Program of the Department of Veterans Affairs, healthcare benefit programs for the Department of Defense and Department of Veterans Affairs. 

Mr. Smith fraudulently billed the two healthcare benefits programs for medically unnecessary compound drugs from a pharmacy in Broward, Fla., where he was executive vice president at the time, the U.S. Attorney's Office for the Southern District of Florida announced Jan. 26. 

Three details: 

1. Mr. Smith has pleaded guilty to one count of conspiring to commit healthcare fraud and faces up to 10 years in federal prison. His sentencing is scheduled for April 5. 

2. Mr. Smith allegedly worked with co-conspirators and paid about $40 million in kickbacks to patients and physicians in exchange for their ordering expensive pain creams and other compound drugs that were medically unnecessary, the U.S. Attorney's Office said. 

3. For a one-month supply of the drugs, reimbursement rates sometimes reached $15,000. In all, Tricare and CHAMPVA were defrauded about $88 million in the scheme. 

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