Doctor among 13 charged in $40 million workers comp fraud involving unnecessary pain medicine
July 11, 2018
A doctor who practiced medicine in Houston pleaded not guilty to federal charges Tuesday that he aided in a wide-ranging fraud scheme that allegedly netted millions of dollars for pharmacies and allowed injured federal workers and members of the U.S. military to obtain pain medication that was not medically necessary.
Dr. James Don Jackson, a general surgeon, is one of three doctors and 13 defendants under federal indictment for the alleged scam, which stretched from Houston to Atlanta and Columbus. In all, prosecutors say government insurance agencies that cover federal workers compensation and medical costs for members of the U.S. armed services paid out $39.7 million for false and fraudulent prescription claims for compounded drugs that patients didn't need.
The indictment sheds light on the greatly expanding business done by compounding pharmacies amid a nationwide opioid crisis, in which patients have resorted to new means for getting a prescription-strength high.
Compounded medicines, which pharmacists make by combining or altering commercial drugs to meet individual patients' needs, don't face the same FDA scrutiny, nor are they subject to fixed prices or guidelines as are other prescription medicines. These businesses are particularly susceptible to fraud, waste and abuse, according to Labor Department officials. A single 15 oz. pain-relief cream can go for as much as $15,000, according to testimony in Washington, D.C., by a Labor Department official before a congressional subcommittee on workforce protections.
Scott S. Dahl, Inspector General for the Labor Department, told the subcommittee that Federal Employees' Compensation Act had spent $2 million for compounded drugs in 2011. By 2016, spending on compound medicines had skyrocketed to $263 million.