CAMDEN — An 11th person has admitted his role in a wide-ranging insurance scam that defrauded the state and health insurers out of millions of dollars.
Pharmaceutical sales representative Andrew Gerstel, 39, of Galloway, pleaded guilty to conspiracy to commit health care fraud, the U.S.Attorney’s Office said in a statement.
Gerstel could receive up to 10 years in prison and be fined as much as $250,000 when he is sentenced Feb. 26. He must forfeit $184,389.05 he was paid for taking part in the scheme and pay restitution of at least $483,946.72.
Between January 2015 to April 2016, Gerstel helped convince people — including teachers, firefighters, local and state police and other state employees with generous health plans — to agree to order unnecessary prescriptions from a still unnamed, out-of-state compounding pharmacy, officials said. In exchange, they received cash, prosecutors have said.
The doctors would then sign prescriptions without ever evaluating patients, prosecutors have said. The prescriptions were filled by the compounding pharmacy. The medications prescribed were those that offered the highest-possible reimbursement, prosecutors have said.
The pharmacy’s benefits administrator, who has not been named but is employed by the state benefits program, then reimbursed the claims, paying up to thousands of state dollars for each prescription, authorities said.
Roughly half of the $50 million that the pharmacy benefits administrator paid to the compounding pharmacy was for prescriptions that the conspirators arranged.
Gerstel received a percentage of the money paid to the compounding pharmacy.
Drugs from compounding pharmacies cost far more than regular drugs because they are mixed for individual patients. For example, a doctor could order a prescription from a compounding pharmacy if a patient is allergic to a component of an existing medication.
Examples of compound medications include vitamin combinations, pain creams, scar creams, antifungal creams, and libido creams.
Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, Dr. John Gaffney, Judd Holt, George Gavras, Richard Zappala, and Michael Neopolitan have previously pleaded guilty as part of the scheme and await sentencing.
Jeff Goldman may be reached at email@example.com. Follow him on Twitter @JeffSGoldman. Find NJ.com on Facebook.
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