The Placebo Effect

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36414458 - rear view of a pharmacist working in lab coats in the pharmacy

Topical anti-inflammatory creams are one of the best ways to safely reduce inflammation and pain in muscles and joints. (That’s assuming the anti-inflammation drug is actually included in the cream.) A Fayetteville, North Carolina pharmacist committed healthcare fraud by billing both Medicare and Medicaid for a special ingredient that would relieve pain, but he neglected to include it when he mixed the special compounded cream that he sold to his clients.

Researchers use placebos when they want to test the effectiveness of a medical treatment. During the trial, some patients receive a specific drug, while others will receive a placebo, or substitute that does not contain the drug. Today’s criminal was not testing any drugs. (He was just trying to get away with fraud.)

Anti-inflammatory creams work to relieve pain and reduce swelling when they are absorbed through the skin, then move deeper to areas of inflammation. (Obviously, if the anti-inflammation properties are missing, the cream isn’t going to do much good at relieving pain or swelling.) The pharmacist, who operated two pharmacies in Pembroke and Rowland, instructed his staff to falsely bill both Medicare and Medicaid for the drug Ketoprofen, a medication that is used to reduce swelling and treat mild to moderate pain. (In the process, he induced more pain for his clients and the government, who footed the bill for the ruse.)

 Over four years, the corrupt Fayetteville, North Carolina pharmacist mixed and sold pain creams to the public. He stuck federal taxpayers with the bill through Medicare and Medicaid. The 35-year-old pleaded guilty to healthcare fraud and must serve one year and one day in jail to be followed by three years of supervised release. He must also pay restitution of $1,961,176.56 to Medicare and $479,923.50 to North Carolina’s Medicaid program. (He has already surrendered his pharmacist’s license and paid back nearly $2 million in restitution so far.)

Suffice to say, this pharmacist was conducting a fraud scheme, not a clinical trial. The government had a highly inflammatory response to the scam and consequently reduced the pain caused by his fraudulent acts by successfully prosecuting and convicting this criminal. (Unfortunately, there’s no drug that could reduce the pain he will experience while serving out his prison term and paying restitution. Looks like he’ll get a taste of his own bad medicine.)

Today’s “Fraud of the Day” is based on an article, “Fayetteville Pharmacist sentenced for fraud,” published by The Fayetteville Observer on October 11, 2017.

GREENVILLE, N.C. (AP) – Federal prosecutors say a North Carolina pharmacist has been given a prison sentence after he pleaded guilty to health care fraud conspiracy.

The U.S. Department of Justice said 35-year-old Justin Lawrence Daniel was sentenced in federal court in Greenville on Tuesday to 12 months and a day. In addition, Daniel was ordered to make restitution of nearly $2.5 million. A news release said Daniel paid $2 million in advance of his sentencing.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.