Feb. 27, 2019

A central Ohio couple has pleaded guilty to federal health-care fraud charges for conspiring with others to sell a bogus pain cream to those seeking pain relief, including attendees at The Arnold Sports Festival and Columbus first responders.

Officials with the U.S. Attorney’s Office in the southern district of Ohio said Amy M. Kirk, a nurse practitioner in Columbus, and Ryan D. Edney of Plain City, each signed plea deals for conspiracy to commit health-care fraud, according to court records.

Each of them faces up to 10 years in prison and a $250,000 fine. The plea deals are part of an ongoing federal investigation into a bogus prescription drug ring, said Ken Affedlt, an assistant U.S. district attorney for the southern district.

Kirk, who worked at Pain Management Consortium in Columbus, and Edney were part of a bigger scheme that pushed a compound drug lotion they described as a “pain cream.” The pitch they gave was that the cream was “free” and delivered pain relief and skin rejuvenation, among other remedies, federal prosecutors and a city police officer and firefighter told The Dispatch.

Affeldt said the pair set up kiosks at the "Arnold" and walked into Columbus police and fire stations in 2015 to recruit patients.

Edney had set up a shell company called RX Health Solutions LLC to process the claims.

The promises of relief were bogus, according to court records, along with the claim that the cream was free. The couple, along with owners of Topical Rx Pharmacy, based in Florida, would not charge the patients directly, but instead billed their health-care plans, the Ohio Department of Medicaid or TRICARE, which offers health care to active duty military members.

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The city of Columbus’ health-care plans were billed $8,100 a tube in the first quarter of 2015. From February to June 2015, city employees submitted 283 prescriptions for a compound cream for a total of $2.3 million, according to city records provided to The Dispatch. Those prescriptions were filled by Topical Rx.

The cream sent to Columbus firefighters and police officers was nothing more than lotion and a skin supplement, according to records provided to The Dispatch.

Kirk and Edney, who are engaged, together were paid $350,000 in kickbacks for recruiting patients, according to court records.

Robert Krapenc, Edney’s attorney, said Edney was duped into believing the creams had medicinal value.

“He is a real small fish in this thing,” Krapenc said. “He was led to believe these would help reduce reliance on opioids and he was duped into believing this and he had no idea how much insurance companies were being billed for the creams.”

Kirk's attorney echoed the same sentiments and said she is only guilty of issuing prescriptions without seeing some patients.

And although city employees paid nothing out-of-pocket for the cream, they — and taxpayers — were hit with the largest health-care premium increase in more than a decade in 2016. Taxpayers funded $177.2 million, or 88 percent, of the health-care package that year. City employees paid the remaining 12 percent.

Topical Rx was registered as a limited liability corporation in Florida from 2012 to 2017 before it was dissolved, according to the Florida Department of State's business registry.

The pharmacy closed, according to the state's pharmacy board database.

Bobby M. Vickers Jr., who couldn't be reached for comment, was listed as a managing partner of that pharmacy.

The Dispatch first reported parts of the scheme last year as part of a year-long investigation called “Side Effects” which examined the practice of pharmacy benefit managers that are supposed to closely watch such transactions.

Federal authorities said they had been investigating but were unaware Columbus employees had been victims until they read the story.

“If it’s true that these people did these things I hope justice happens quickly,” said Keith Ferrell, president of the Fraternal Order of Police Capital City Lodge No. 9. “Health care is a mess right now and individuals causing more chaos in a chaotic system … I think an example needs to be set."

Ferrell added that holding people accountable is necessary to protect his officers and taxpayers from health-care fraud.

The city contracts with a pharmacy benefit manager that is supposed to monitor and curtail such drug costs. The contract calls for monthly and quarterly monitoring of such prescriptions.

It’s unclear why officials from Catamaran, the city’s pharmacy benefit manager at the time, didn’t catch the scheme. Catamaran was in the process of being bought by OptumRx, one of the country’s three largest pharmacy benefit managers, or PBMs.

Drew Krejci, Optum’s spokesman, said last year that the scheme was caught quickly but the city’s union contracts stymied a quick fix. Krejci said that because the city has to negotiate such changes through its unions, it took months to stop the sale of the cream to city workers.