Fusion RX

Fusion RX (Photo courtesy Google Images)

LOS ANGELES  - Sentencing is scheduled today for a Westside pharmacy and its owner, who pleaded guilty to federal charges stemming from a scheme that generated millions of dollars in reimbursements for compounded drugs through the payment of illegal kickbacks for referrals and by fraudulently paying patients' co-payments.

Navid Vahedi of Brentwood pleaded guilty last year to one count of conspiracy to commit healthcare fraud and payment of illegal remunerations. He also entered a guilty plea to the felony offense on behalf of his business, Fusion Rx Compounding Pharmacy.

The pharmacy was a provider of compounded drugs, which are tailor-made products that doctors may prescribe when the FDA-approved alternative does not meet the health needs of a patient.

Vahedi faces up to five years in federal prison and will pay restitution of more than $4 million.

In addition to the restitution, Vahedi agreed to forfeit $1.3 million. Under the terms of the agreements, Fusion Rx also agreed to pay a fine that will divest itself of all its remaining assets, while Vahedi will have his pharmacist license revoked and both Vahedi and Fusion Rx will be excluded from federal healthcare programs such as Medicare and Medicaid.

Vahedi admitted routing millions of dollars in kickback payments through two marketers to steer prescriptions for compounded drugs to Fusion Rx.

As part of the scheme, Vahedi and the marketers provided doctors with preprinted prescription script pads that offered options to maximize the amount of insurance reimbursement, federal prosecutors said.

From May 2014 to at February 2016, Fusion Rx received about $14 million in reimbursements from claims for compounded drug prescriptions, prosecutors said.

As part of its contracts with insurers, the pharmacy was obligated to collect co-payments from patients. But because the co-payments might discourage patients from requesting the costly prescriptions, Fusion Rx failed to collect co-payments with any regularity, and in some cases gave patients gift cards to offset the co-payment amounts, according to court documents.

After an audit threatened to expose the scheme, Vahedi used Fusion Rx funds to purchase American Express gift cards, which were used to make co- payments for some prescriptions without patients' knowledge, prosecutors said.

Fusion Rx then submitted claims on those prescriptions to insurers, falsely representing that patients had paid the required co-payments.

The two marketers involved in the scheme -- Joshua Pearson, 41, of St. George, Utah, and Joseph Kieffer, 40, of West Los Angeles -- previously pleaded guilty.