Ocean County Woman Sentenced to Two Years in Prison for Defrauding State Health Benefits Program

CAMDEN, N.J. – An Ocean County woman was sentenced today to 24 months in prison for defrauding New Jersey state health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced.

Federal Officials said Kristie Masucci, 37, of Cedar Run, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging her with conspiracy to commit health care fraud. Judge Kugler imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

From January 2015 through February 2016, Masucci served as a recruiter in the conspiracy and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the information as the “Compounding Pharmacy.”

The conspirators learned that specific compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications.

An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents.

The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.

Masucci and conspirators working under her recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary.

In return, the pharmacy paid one of Masucci’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Masucci and other members of the conspiracy.

Masucci’s conspirators would then cause the prescriptions to be signed by a doctor who never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

According to the information, the Pharmacy Benefits Administrator paid the Compounding Pharmacy more than $50 million for compounded medications mailed to individuals in New Jersey, including $1.8 million for prescriptions submitted by Masucci and her cohorts. Masucci received $388,608 for her role in the scheme.