"A Tennessee clinic swindled the military out of $65M" by selling prescriptions for cream that cost $14,500 each
The scheme that Schneid stumbled upon in 2015 stretched from California to Tennessee, involving people and companies from at least four states. In Tennessee, two doctors and a nurse practitioner have pleaded guilty to defrauding a military insurance program, called Tricare, out of $65 million. At least two more suspects are still facing charges. Federal prosecutors also are attempting to seize swaths of East Tennessee farmland, a strip mall, and a large estate they argue was purchased with health care fraud profits.
That company is also linked to an even larger scheme in Mississippi, where seven people have pleaded guilty to using similar medicinal creams to defraud the federal government out of an additional $400 million.
The creams were marketed as “compounded” medication. Compounding is a practice in which a pharmacist mixes several medicines into one to create a treatment tailored for a specific patient. Because every mix is unique, compounded medicines are not reviewed by the Food and Drug Administration and often cost much more than standard medicine. As of 2015, Tricare covered the full cost of compounded medicine for active-duty troops.