A Kent man has been arrested for allegedly defrauding private and federally funded health care benefit programs of at least $10 million through claims for unnecessary prescriptions, according to the Department of Justice, District of New Jersey.
Kent Courtheyn, 35, was the alleged owner and operator of two companies involved in the sales and marketing of compound medications, IntegriMed Solutions LLC and KA Compounding LLC. He has been charged by a federal grand jury with conspiring to commit health care fraud and conspiring to violate the Anti-Kickback Statute.
He allegedly partnered with Steven M. Butcher of New York, who owned and operated another marketing company, MedMax LLC.
Butcher pleaded guilty on Dec. 14, 2018, to conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Stature, according to the Department of Justice. He allegedly defrauded programs of at least $10 million, including $3.5 million that was stolen from a federal government fund for Department of Defense workers, and money from a health care provider whose servers are located in New Jersey. He is awaiting sentencing.
A compound medication is a drug that is specifically prepared by a pharmacist for the person taking the medication, based on a prescription from a doctor. They are not FDA approved.
From July 2014 to July 2016, Courtheyn allegedly ran a scheme to defraud federally funded health care benefits, such as TRICARE, as well as private health care benefit programs, according to the U.S. Department of Justice.
TRICARE is a health care entitlement program of the U.S. Department of Defense that provides services for active duty service members, the National Guard and Reserve, retirees, families and survivors.
Courtheyn allegedly recruited individuals to submit false claims for medications such as “pain creams, scar creams, wound creams and metabolic vitamins.” He allegedly targeted people with health insurance plans that paid for compounded medications and had high reimbursements.
The Department of Justice said Courtheyn and Butcher worked with compound medication pharmacies and would send prescriptions to particular pharmacies, who handled sending in claims to health insurance. In return for steering prescriptions to certain compounding pharmacies, the DOJ said the two men got a percent of the reimbursement received by the pharmacy for each paid claim, which could be as low as $3,000 and as high as $43,000 per prescription.
Courtheyn, a former medical salesman, allegedly operated the two companies he owned, IntegriMed and KA Compounding, as a multi-level marketing scheme. He recruited individuals as “sales representatives,” who were paid a certain percentage of the reimbursement. If the sales rep was a beneficiary of a paying health insurance plan, the Justice Department says Courtheyn also paid those individuals for getting their own or their family member’s medically unnecessary compounded medications.
Some of the people involved in the scheme were listed as veterans and medical salesman in Pennsylvania, California, Utah and Indiana, according to the indictment. The pharmacies involved were based in Mississippi and California. They were not named.
The DOJ also said the medications were meant to create a maximum profit, not to fit any medical need. Courtheyn allegedly defrauded health care companies of at least $10 million, including TRICARE, which was defrauded of at least $3.5 million.
If he is convicted, Courtheyn faces a possible punishment of 15 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.