Question of the DAy August 25, 2014 Why aren't more states filing these types of actions? Note Ketamine is a Schedule II controlled substance also known as a "date rape" drug. So why is it "medically necessary" in so many cases where topical compounded creams are prescribed?

A.G. Schneiderman Announces $100,000 Settlement With Pharmacy Owner For Overbilling Medicaid For Ketamine

Queens Pharmacy Overbilled Medicaid For Reimbursement For Larger Ketamine Dosages Than Those Used
Schneiderman: Settlement Holds Pharmacy Owner Accountable For Profiting At Taxpayers’ Expense

NEW YORK - Attorney General Eric T. Schneiderman announced today a $100,000 settlement with Oleg Aronov, a co-owner of Comprehensive Pharmacy, Inc. for overbilling taxpayers relating to the dispensation of compounded medications containing the drug Ketamine. Until its closing in 2009, Comprehensive Pharmacy was an enrolled provider of health care services to New Yorkers covered by Medicaid. Through its investigation, the Attorney General’s Office discovered that Comprehensive Pharmacy had overbilled Medicaid for Ketamine.

“Medical professionals who overbill Medicaid rob the program of important resources, and deprive many New Yorkers of essential services. This settlement holds Mr. Aronov accountable for profiting at the expense of taxpayers,” said Attorney General Schneiderman. “My office will remain committed to returning any funds misspent through violations of the Medicaid program.”

In addition to providing medications in the form of a pill or as a liquid, many pharmacies supply medications to patients in the form of creams. These compounded medications are usually prepared on site by a pharmacist. With regard to compounded medications containing Ketamine, Medicaid rules and regulations dictate that a provider may only seek reimbursement for the amount of Ketamine actually used in the compounded medication. Comprehensive Pharmacy, despite these rules, billed Medicaid as if Ketamine was the entire weight of the compound, when it was not. Attorney General Schneiderman’s investigation revealed that Comprehensive Pharmacy had submitted to the program tens of thousands of dollars in erroneous claims for compounded medications containing Ketamine.

Through his settlement with the Attorney General’s Office, Aronov agrees to reimburse the State, and admits to submitting erroneous claims to Medicaid indicating Comprehensive Pharmacy had dispensed compounded medications containing more Ketamine than was actually present in the medications dispensed to Medicaid patients.

While Ketamine, a general anesthesia, has a number of legitimate uses, it is also abused and is known as a “date rape” drug because of its ability to induce a dissociative state. Ketamine is classified as a Schedule III controlled substance. The Attorney General’s investigation did not uncover any evidence that the compounded medications prepared and erroneously billed by Comprehensive Pharmacy were being used for any illegal or illicit purposes.”

The Attorney General’s investigation originated from a referral by the New York State Office of the Medicaid Inspector General (OMIG). Attorney General Schneiderman would like to thank OMIG for its assistance in resolving this matter.

The case was handled by Deputy Regional Director Thomas O’Hanlon and Special Assistant Attorney General Samuel Yee, under the supervision of Assistant Deputy Attorney General Paul Mahoney and Special Deputy Attorney General Monica Hickey-Martin. The investigation was conducted by Senior Special Investigator Thomas Dowd, under the supervision of Chief Investigator Thaddeus Fischer, and by Special Auditor Investigator Olga Sunitsky, under the supervision of Supervising Special Auditor Emmanuel Archer and the Medicaid Fraud Control Unit’s New York City Regional Chief Auditor Thomasina Piccolo-Smith. 

A copy of today’s settlement can be found here: www.ag.ny.gov/pdfs/Oleg-2013.pdf