February 12, 2021

Compounding Pharmacy Owner Pleads Guilty to Health Care Fraud and Kickback Scheme that Led to $14 Million in Payments

Navid Vahedi, the owner of Fusion Rx Compounding Pharmacy, pleaded guilty to one count of conspiracy to commit health care fraud and payment of illegal remunerations in United States District Court for the Central District of California. Fusion Rx was obligated to collect copayments from patients, but as copayments may discourage patients from requesting expensive compounded drug scripts, Fusion Rx did not do so with any regularity. After an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered, Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge. Fusion Rx then submitted claims on these prescriptions to various insurance providers, falsely representing that patients had paid the required copayments. Further Vahedi and two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for the compounded drug prescriptions.