Fraudulent scheme targeting students steals $12M from UC SHIP
By Dina Stumpf
April 21, 2017 5:17 p.m.
University of California students were targeted in an allegedly fraudulent scheme that stole almost $12 million from the UC Student Health Insurance Plan.
UC officials announced Thursday that multiple defendants falsified medical prescriptions under students’ names. These defendants created California Clinical Trials LLC, a company under which the scheme was operated. The UC filed a complaint in the Los Angeles Superior Court on Thursday against the defendants.
The defendants targeted more than 500 students across six campuses through Facebook ads that offered easy money if they took part in a CCT study. The defendants also allegedly attended job fairs on campus and offered prospective jobs at a startup pharmaceutical company to students who disclosed their UC SHIP member identification numbers and other personal information and agreed to sample medications.
The majority of the prescription drugs are cheap and off-patent medications, which are becoming more frequently used in health care fraud schemes. The drugs are then charged at thousands of dollars per drug to the insurers, patients and government health care programs.
One podiatrist allegedly wrote more than 600 prescriptions that cost over $1.7 million in a single day, according to the court file. These prescriptions were allegedly packed in a pharmacy in Chino, California.
“This needs to be immediately stopped,” said John Stobo, executive vice president of UC Health. “We have identified nine different health care providers who prescribed medications to these students, likely without any indication of physical exams or even a physician-patient relationship.”
UC spokesperson Stephanie Beechem said in an email the UC will seek a temporary restraining order against the defendants by early next week.
The UC is currently informing students whose private information were used in the scheme.
