Two Cleveland, Tenn. doctors plead guilty to defrauding military insurer

Two Tennessee doctors have pleaded guilty to defrauding military patients. (Image: MGN)

Attorneys with the Southern California U.S. Attorney's Office say two doctors from Cleveland, Tennessee have pleaded guilty to defrauding military patients out of more than $65 million by prescribing thousands of exorbitantly expensive compounded medications to patients that they never saw or examined.

Carl Lindblad and Susan Vergot, pleaded guilty to conspiracy to commit health care fraud in federal court on April 11th. Their sentencings are scheduled for June 29th.

At issue are what are known as compounded medications. They are specialty medications mixed by a pharmacist to meet the needs of a patient. The Food & Drug Administration (FDA) has not approved them, but they are legal to prescribe when a physician determines an FDA-approved medication doesn't meet a patient's particular needs. (For example, a patient may need a compounded medication because she is allergic to a dye in an FDA-approved drug).

The Southern California U.S. Attorney's office release says according to the guilty pleas, a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents to get compounded medications that would be paid for by TRICARE, which is the military's health care program. All of the recipients of the compounded medications were TRICARE beneficiaries.

This information was sent to Choice MD, the Tennessee medical clinic that employed Drs. Lindblad and Vergot. Choice MD is a walk-in clinic on Candies Creek Ridge Road.

The release says Drs. Lindblad and Vergot then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person.

Once signed by the doctors, these prescriptions were not given to the beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, which filled the prescriptions and billed TRICARE at exorbitant prices.

Josh Morgan, a former Marine from San Diego, pleaded guilty last month to Conspiracy to Commit Health Care Fraud for his role in recruiting TRICARE beneficiaries to fraudulently receive these prescriptions.

Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – Drs. Lindblad and Vergot authorized 4,442 total prescriptions. Over this time, their co-conspirators billed TRICARE $65,679,512 for these prescriptions.

The release says Lindblad and Vergot represent the fifth and sixth defendants charged in relation to this fraud scheme. In addition to Morgan, Jimmy and Ashley Collins, the owners of Choice MD, and CFK, Inc., the owner of a co-conspirator pharmacy, were indicted in March 2018 on charges of Conspiracy to Commit Health Care Fraud and Illegal Payments of Remunerations. That case remains pending.

Depend on us to keep you posted on this developing story.

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