Mississippi Compounding Pharmacist Sentenced to 5 Years in Prison for Health Care Fraud

The Department of Justice has announced that a pharmacist who pled guilty to a multimillion-dollar scheme to defraud health care benefit programs has been sentenced to 5 years in prison. The pharmacist will also have to pay restitution and forfeiture of all assets gained from the fraud, including money, cars, property, and jewelry.

The pharmacist, David “Jason” Rutland, and 2 coconspirators were charged by the government with a plan "to solicit and pay kickbacks and bribes to marketers, physicians, other medical providers and beneficiaries to refer, prescribe, and receive prescriptions for medically unnecessary compound medications."

Over $515 million in fraudulent prescription billings were made to TRICARE (the military health care program), Medicare, Medicaid, and private health care benefit providers in the state. Rutland, a pharmacist and co-owner of compounding pharmacies, was accused of numerous wrongdoings, including adjusting prescription formulations to ensure the highest reimbursement without regard to efficacy, soliciting recruiters to procure prescriptions for high-margin compounded medications, and paying the recruiters commissions based on the percentage of reimbursements paid by pharmacy benefit managers and health care benefits programs.

Rutland also routinely and systematically waived and/or reduced copayments to be paid by beneficiaries and members, including using a purported copayment assistance program to falsely make it appear as if his pharmacy and its affiliate compounding pharmacies had been collecting copayments.

Rutland pleaded guilty to “conspiracy to defraud the United States and solicit, receive, offer, and pay illegal kickbacks” in the summer of 2021. In early 2022, he was sentenced to prison. His 2 coconspirators also pleaded guilty. One was sentenced in December 2021 to 2.5 years in prison, and the other will be sentenced in March 2022.