That’s Not What I Was Prescribed

Confident Doctor shaking hands with patients talk in the hospital

The American justice system does not discriminate based on age. If you commit fraud, they’ll prosecute you whether you’re straight out of high school or going through a midlife crisis. The latter may be the case for Jennifer Caloia, age 57, who was sentenced after previously pleading guilty to one felony count of healthcare fraud.

Caloia was a licensed pharmacist who owned and operated Dougherty Pharmacy in Morrisville, New York, from 1998 to 2015. She previously admitted that between 2011 and 2015 she defrauded public and private health insurance programs by submitting false and fraudulent claims for prescription drugs that the pharmacy did not dispense.

She also admitted that customers who submitted their prescriptions for medications had their health insurance providers billed for more expensive drugs than those prescribed. (Overbilling is one of the most common forms of healthcare fraud as it can be passed off as pharmacists legitimately doing their job.) To facilitate this scheme, Caloia changed the names of some of the prescription drugs in the software she used to communicate with insurance companies and to print drug labels. (That’s sneaky.) 

The software allowed Caloia to submit fraudulent claims while providing the customer with the appropriate labels and instructions. (I bet the software doesn’t do that anymore.) However, in a few instances, she dispensed a drug different than what a customer’s doctor had prescribed as part of her scheme. (She wasn’t just messing with checkbooks, she was messing with patients’ health.)

Caloia was sentenced to serve a two-year term of probation and ordered to perform 80 hours of community service, pay a fine in the amount of $10,000.00, pay a special assessment of $100, and pay restitution in the amount of $110,431 to the public and private insurers affected by her fraud scheme. (Giving back to the community is something that she was supposed to be doing all along.)  

In separately negotiated civil settlements with the Civil Division of the United States Attorney’s Office for the Northern District of New York and the New York State Attorney General’s Office, Caloia and her company agreed to pay $92,308.76 related to her submission of false claims to public insurers such as Medicare and Medicaid. Caloia no longer owns or operates Dougherty Pharmacy. (She lost her money, her job, and her reputation and for what?)

The civil settlement resolves a whistleblower lawsuit which allow private persons, knowns as “relators,” to file civil actions on behalf of the government and share in any recovery.  The relator in this case will receive $18,461.75 of the settlement proceeds. (Who says it doesn’t pay to tell the truth.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Former Madison County Pharmacy Owner Sentenced for Health Care Fraud,” published on September 1, 2021.

SYRACUSE, NEW YORK – Jennifer Caloia, age 57, a licensed pharmacist who owned and operated Dougherty Pharmacy in Morrisville, New York, from 1998 to 2015, was sentenced today in federal court in Utica to serve a two-year term of probation, perform 80 hours of community service, a fine in the amount of $10,000.00, a special assessment of $100 after previously pleading guilty to one felony count of health care fraud.

The announcement was made by Acting United States Attorney Antoinette T. Bacon; Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI); Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (HHS OIG); Ralph D. Tortora III, Regional Director, New York Attorney General’s Medicaid Fraud Control Unit, Syracuse Office; Carol S. Hamilton, Regional Director, U.S. Department of Labor Employee Benefits Security Administration (DOL EBSA); and Shirin Emami, Acting Superintendent, New York State Department of Financial Services.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.