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NYC Best Price Rule Fraud

Medicaid and Best Price Rule Fraud: Understanding the Complexities

Introduction

To ensure that low-income, disabled, and elderly Americans have access to health coverage, Congress and President Lyndon B. Johnson established Medicaid as a federal-state partnership in 1965. The program pays for preventive care, doctor visits, hospital stays, and medications for individuals who would otherwise be unable to afford care.

Expansion of Medicaid

Research has shown that children and adults covered under Medicaid have better health outcomes than people who are uninsured, and the success of the program has been widely recognized. In 2009, Congress and President Barack Obama included a provision in the Patient Protection and Affordable Care Act, also known as Obamacare, to expand Medicaid to cover more low-income adults.

Medicaid Operations and Regulation

While Medicaid is a government entity operated under the joint auspices of the governments of the 50 states and the District of Columbia and the federal Department of Health and Human Services, it must contract with private entities – such as doctors, hospitals, and pharmaceutical companies – to provide care to recipients. To save money for taxpayers, these transactions are closely regulated to ensure the government pays a fair price for medical services and prescription drugs. For prescription drugs, Medicaid has formulated the “best price rule.”

Understanding the Best Price Rule

Under the best price rule, the best price is the lowest price that any retailer or other entity pays a pharmaceutical company or drug manufacturer for a given prescription drug. In calculating the best price, the company must determine the price factoring in volume and cash discounts as well as rebates, incentives, and other financial factors. Corporations selling to Medicaid must also report the average price they charge to all of their customers, known as the average manufacturer’s price.

George FernandezGeorge Fernandez
14:16 30 Apr 24
Excellent 10 out of 10, Helped resolve my case. Jeremy explained everything and made everything easy to understand.
RajRaj
21:33 24 Apr 24
If you are looking for a lawyer that listens, is aggressive where needed, and holds his word above all else, Todd is the best pick. I had hired multiple attorneys prior to hiring the Spodek Group for a white collar case. The first thing that stood out to me was the cost, as anyone going through the process and dealing with the system, money was tight at that time - especially after hiring and firing multiple lawyers. The cost was not as high as others which was definitely a plus. Todd's intake process was also unlike other attorneys. He took the time to actually listen. He cared. He was trying to put himself in my shoes while I was explaining the situation to him and he really took the time to understand the whole situation. Other lawyers will give you 15 mins and send you a retainer agreement. Not Todd, I think he spent almost two hours with me as I was explaining everything.Not only was he great during the onboarding process, he was supportive and very informative through the entire plea process and eventually sentencing. After hiring him, I asked if I should hire a prison consultant, he told me to save my money as he would do everything they would. He was right and held up to his word. Later on I would hear from others that went with the prison consultants that they were a waste of money - I am glad I listened to Todd!When it came time for sentencing, two days prior to sentencing, the prosecutor tried increasing my proposed prison time by almost double - apparently a normal move. Todd and his team worked with me non-stop through the weekend prior to sentencing to ensure that I was not given additional prison time. Again, he took the time to listen and came up with a strategy to explain the case with great detail.Unfortunately, I did plead guilty as that was my best option. Todd and his whole team wrote up nearly 300 pages of a summary of what happened and why I should not be given prison time. If I breakdown the amount I spent with Todd versus the amount of work that I saw being done, I am shocked I was not charged four times as much. The other benefit was, a lot of criminal defense lawyers were just a single attorney with a paralegal or two. Todd had a team of people that I dealt with (5-7 people that I interacted with), but he was ALWAYS accessible. It would never take him more than an hour to reply unless he was in court.I was sentenced to prison and I was emotionally distraught. Todd and his team did whatever they could even after sentencing to make sure I was alright. He personally stayed in touch with my family to ensure I was doing alright and offered support to them. Most lawyers would consider the job complete at sentencing, not Todd.After prison, Todd still spent time with me to make sure I was on the right track and avoiding any potential risks in the future. He has also been giving advice on how to navigate probation etc and has not been looking at the clock for billing.Although I wish I had never been arrested in the first place, I am glad I had Todd and his team in my corner. Without them I likely would have had to spend a lot more time in prison than I did.Thank you, Todd, and the entire Spodek Law team, for helping turn what was a nightmare into a manageable situation!
Yelva Saint-PreuxYelva Saint-Preux
19:26 19 Apr 24
I am immensely grateful to the entire team at Spodek Law Group for their unwavering dedication and exceptional expertise throughout my case. From our initial consultation to the final resolution, their professionalism and tireless advocacy made all the difference. Their strategic approach and attention to detail instilled confidence in me every step of the way.Thanks to their hard work and commitment, we achieved a truly favorable outcome that exceeded my expectations. Not only did they navigate the complexities of my case with precision, but they also provided invaluable support and guidance during what was undoubtedly a challenging time. I cannot recommend Spodek Law Group highly enough, especially attorneys Todd Spodek and Claire Banks; they are beacons of excellence in the legal profession.YSP.
Katherine SunKatherine Sun
18:08 18 Apr 24
my lawyer is Alex Zhik. Efficient, patient and professional
Nun yaNun ya
17:48 18 Apr 24
Todd, Ralph and Alex are amazing. Helped my husband get from a double digit number with multiple charges to a single digit, by the time I blink he will be out. They very professional and help with all your needs. They dealt with my anxiety and worry very well and they understand that your family member needs to get home as soon as possible.
Keisha ParrisKeisha Parris
20:45 15 Mar 24
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko BeautyTaïko Beauty
16:26 15 Mar 24
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence.Thank you team!
K MarK Mar
01:37 25 Jan 24
I recently had Spodek Law Group represent me for a legal matter in NYC and I am thoroughly impressed with their services.Alex Zhik secured the best possible outcome for my case.It was a seamless journey from the initial consultation to the resolution of my legal matter. From the moment I spoke to Todd about my case, his enthusiasm to help was evident, setting a positive tone for the entire experience. The efficiency and professionalism displayed by the team is commendable.A particularly noteworthy aspect of their service is their user-friendly portal to upload your documents/evidence. This not only simplified the process, but showcases their commitment to streamline the client experience.Lastly, in an industry where legal fees can often be a concern, I found their pricing to be very reasonable, making needing legal assistance feel accessible and stress-free.I am grateful for their support and wouldn't hesitate to turn to them again in the future.
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Implications of the Best Price Rule

Since Medicaid purchases a very large number of medications each year – and is a federal entity – it is guaranteed a rebate based on a formula that links the average manufacturers’ price and the best price. The specific amount of the rebate varies based on the type of drug and the size of the difference between the two prices.

Fraud Prevention and Legal Ramifications

Given the massive volume of transactions with Medicaid, there is a strong financial incentive for companies to falsely report prices to Medicaid in order to earn more money and part with less of it through their rebates to federal and state governments. To prevent this type of fraud, the federal government has established strong criminal and civil penalties for best price fraud.

Under a federal law known as the False Claims Act, whistleblowers are incentivized to report fraud that impacts the government’s finances to appropriate authorities. The Department of Justice is empowered to investigate whistleblower allegations and can pursue civil lawsuits to recoup the amount that was fraudulently obtained – and a multiple of that amount as a penalty for misconduct. In 2012, a multinational pharmaceutical company paid $300 million to settle a case resulting from best price rule fraud.

Legal Consequences of Best Price Rule Fraud

The criminal charges that result from best price fraud are also very serious. Individuals who knowingly submitted false information about prices to Medicaid can be charged with a variety of federal crimes, including making false statements, wire fraud, mail fraud, and several charges that relate specifically to defrauding health coverage programs.

Penalties for these criminal charges can vary, but wire fraud charges alone often result in sentences of up to 30 years in prison and fines of up to $1 million. Indictments on best price fraud cases typically involve multiple counts; if convicted on all of them, defendants can effectively face a sentence of life imprisonment.

Legal Defense and Protection

If you, your business, or a loved one are being investigated for or facing charges of best price rule fraud, it is very important that you retain a criminal defense attorney immediately. The thicket of rules surrounding Medicaid and the pharmaceutical industry is very complex and requires an experienced attorney to help make sense of the case and applicable laws.

A qualified defense lawyer can prepare you and your business for an investigation, ensuring that your legal rights are protected. If you ultimately face criminal charges, a criminal defense attorney can work with prosecutors to strike a plea agreement that reduces your criminal liability and limits the sentence you might face. If all else fails, they can also present a vigorous defense before a judge and jury.

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Todd Spodek

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RALPH P. FRANCHO, JR

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JEREMY FEIGENBAUM

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ELIZABETH GARVEY

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CLAIRE BANKS

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RAJESH BARUA

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CHAD LEWIN

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