South Carolina Doctor Will Pay $92,506.30 for Allegedly Engaging in an Illegal Kickback Scheme

A South Carolina doctor has agreed to pay the government $92,506.30 for allegedly accepting illegal kickback payments from OK Compounding, L.L.C., announced U.S. Attorney Trent Shores.

The U.S. Attorney’s Office entered into a settlement agreement with Jerry Back, 62, a medical doctor, in an effort to recoup the costs to the U.S. government resulting from the illegal kickbacks.

This is the eighth kickback settlement since January in the Northern District of Oklahoma. The civil settlements arose from an investigation into numerous health care providers writing prescriptions for pain creams compounded and sold by OK Compounding.

“It is no secret that my office remains focused on protecting the integrity of our federal health care system by holding accountable unscrupulous doctors who have allegedly cheated insurance programs,” said U.S. Attorney Shores. “We will use all tools at our disposal, including civil and criminal remedies, to halt illegal and corrupt practices by medical professionals.”

"This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense health care program known as TRICARE," said DCIS Special Agent in Charge Michael C. Mentavlos. "DCIS will aggressively investigate those health care providers that attempt to defraud the DoD, in order to preserve American taxpayer dollars intended to care for our warfighters, their family members, and our military retirees."

Beginning in 2013, Dr. Back prescribed these pain creams for his patients, facilitating the sale and distribution of the creams.  As compensation for his services, OK Compounding paid Dr. Back what was characterized by the parties as “medical director fees” based upon an hourly rate.  However, the payments Dr. Back received from the company were, in actuality, “kickbacks.”  Because Dr. Back’s patients were insured with TRICARE, a Department of Defense federal health care program for veterans, the kickbacks were in violation of the False Claims Act.  It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance. 

Prohibitions against kickbacks are crucial to insure that financial motives do not undermine the medical judgment of physicians and other health care providers.  The civil False Claims Act is an important tool used to protect the integrity of taxpayer-funded health care programs.

The settlement resolves allegations that Dr. Back had an illegal financial relationship with OK Compounding, concerning pain creams from February through May of 2013.

Affirmative Civil Enforcement (ACE) refers to filing civil lawsuits on behalf of the United States.  The purpose of these civil actions is to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, civil rights or environmental laws.

To report fraud and abuse against the Federal government in the Northern District of Oklahoma, please contact the U.S. Attorney’s Office at 918-382-2700 and speak to a member of the ACE Unit.

Information for fraud against TRICARE can be reported at https://health.mil/Military-Health-Topics/Access-Cost-Quality-and-Safety/Quality-And-Safety-of-Healthcare/Program-Integrity/Fraud-and-Abuse-Report-Submission-Form.

This matter was handled by Assistant U.S. Attorney Marianne Hardcastle, and is the product of a collaborative investigation by the Defense Criminal Investigative Service, Department of Labor – Office of Inspector General (OIG), IRS – Criminal Investigation Division, U.S. Postal Service – OIG, FBI, Department of Veterans Affairs - OIG and the Department of Health and Human Services - OIG.

The claims resolved by the settlement are allegations only; there has been no determination of liability.