Shoals pharmacist pleads guilty, paying $2.5M in Medicare obstruction

Shoals pharmacist pleads guilty, paying $2.5M in Medicare obstruction

MUSCLE SHOALS, AL (WAFF) - A Shoals pharmacist pleaded guilty to to obstructing a Medicare audit in federal court on Thursday.

Rodney Dalton Logan, 63, of Muscle Shoals, pleaded guilty to one count of obstructing a 2012 federal audit of Medicare claims submitted by one of the pharmacies he owned, as charged by the U.S. Attorney's Office for the Northern District of Alabama.

Logan agreed to pay a $2.5 million penalty to the government. His sentencing date has not been scheduled.

Logan, a registered pharmacist, owned Leighton Pharmacy Inc., which did business as Sheffield Pharmacy and Homecare in Sheffield, and Russellville Pharmacy in Russellville. According to Logan's plea agreement with the government, he was the lead pharmacist at both Sheffield and Russellville at various times.

The Sheffield and Russellville pharmacies operated as both compounding and retail pharmacies. A compounding pharmacy is one that prepares customized medications for individual patients, usually by mixing ingredients in order to create a prescription. The two pharmacies sold compounded prescriptions to patients in Alabama and other states.

According to the charges and plea agreement, Logan obstructed a 2012 audit of the Sheffield pharmacy's claims for Medicare reimbursement on compounded prescriptions as follows:

CVS/Caremark Inc. administered prescription drug claims for Medicare Part D and served as an auditor on Medicare's behalf. Part D prohibited reimbursement to pharmacies for compounded medications made using bulk pharmaceutical powders.

Russellville and Sheffield sought Part D reimbursement after February 2009 for compounded medications, primarily topical pain creams, made from bulk powders. The pharmacies, however, used the billing code for the tablet or capsule form of the ingredient.

In response to the 2012 audit, Logan caused Sheffield to submit falsified and misleading documents stating that medications in tablet or capsule form were used as ingredients for the compounded prescriptions.

The maximum penalty for obstructing a federal audit is five years in prison and a fine of $250,000 or twice the amount improperly gained through the defendant's conduct.

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