BRENTWOOD–On Friday, February 5, the U.S. Department of Justice announced that Navid Vahedi, 41, of Brentwood, pleaded guilty to one count of conspiracy to commit health care fraud and payment of illegal remunerations. Vahedi also entered a guilty plea to the offense on behalf of his business, Fusion Rx Compounding Pharmacy.
Fusion Rx was a provider of compounded drugs, which are products doctors may prescribe when the FDA-approved alternative does not meet the needs of a patient. In their plea agreements, Vahedi and Fusion Rx admitted routing millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx.
Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.
Fusion Rx was obligated to collect co-payments from patients as part of contracts with various insurance networks. According to court documents, Fusion Rx did not collect co-payments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments. Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge after an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered. Fusion Rx later submitted claims on these prescriptions falsely representing that patients had paid the required copayments.
Vahedi and Fusion Rx have agreed to pay restitution related to the copayment reimbursement part of the scheme, which is estimated to be $4,405,926. Vahedi also agreed to forfeit $1,338,511 in addition to his obligation under the plea agreement.
Fusion Rx has also agreed to pay a fine sufficient to divest itself of all its remaining assets and Vahedi has agreed to have his pharmacist license revoked. Both Fusion Rx and Vahedi will be excluded from federal health care programs such as Medicaid and Medicare going forward.
A sentencing hearing is scheduled for June 28, in which Vahedi will face a maximum sentence of five years in federal prison.