Feds indict Nixa, Mo. physician, 2 nurses in $2.4 million health care fraud scheme

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Published: Jan. 23, 2020 at 3:53 PM CST
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A federal grand jury indicted a Nixa, Mo. physician, who became the biggest prescriber of a fentanyl spray in the state, for his role in a $2.4 million health care fraud scheme related to kickbacks he received from the producing pharmaceutical company.

Randall D. Halley, 63, faces a 29-count indictment returned by a federal grand jury in Springfield.

Halley operated a private medical practice, Ozark Community Hospital - Christian County Clinic, in Nixa from 2004 to June 2019. Halley was also the medical director at Magnolia Square, a skilled nursing facility in Springfield; at Ozark Riverview Manor, a residential care facility in Ozark; at Ozarks Methodist Manor, a skilled nursing facility in Marionville, Missouri; and at Seasons Hospice & Pallative Care in Springfield.

Halley was one of the top prescribers of the fentanyl spray in the United States. The fentanyl spray, produced by a pharmaceutical company headquartered in Chandler, Arizona, is prescribed for the management of breakthrough pain in adult cancer patients who are already receiving and who are tolerant to around-the-clock opioid therapy for their underlying persistent cancer pain. Breakthrough cancer pain is severe pain that erupts in patients with cancer who are already medicated with a long-acting painkiller. The fentanyl spray is a potent opioid containing fentanyl that was designed to rapidly enter a patient’s bloodstream upon being sprayed under the tongue.

According to the indictment, Halley wrote more than 355 prescriptions for the fentanyl spray from May 2013 through March 2019. During this timeframe, the producing pharmaceutical company paid Halley $92,225 in alleged kickbacks for prescribing the fentanyl spray.

Health Care Fraud

The indictment charges Halley with six counts of health care fraud, six counts of making false statements related to health care, one count of conspiracy to distribute a controlled substance without a legitimate medical purpose, and six counts of distributing a controlled substance without a legitimate medical purpose.

Halley allegedly prescribed the fentanyl spray to numerous patients who did not have cancer or breakthrough cancer pain, or did not otherwise qualify for insurance coverage for the fentanyl spray. Halley allegedly submitted fraudulent prior authorization requests in which he falsely claimed that certain patients had cancer and that they were suffering from breakthrough cancer pain. Other patients had previously been diagnosed with cancer but had recovered, were in complete remission, and/or were suffering from pain unrelated to their prior cancer diagnosis.

Halley refused patients’ requests to switch from the fentanyl spray to another pain relief medication, the indictment says, even when patients suffered debilitating side effects from the fentanyl spray or when they obtained little or no pain relief from the fentanyl spray.

Kickback Conspiracy

Halley is charged with participating in a conspiracy from February 2013 to March 2019 in which he received kickbacks from the pharmaceutical company as an inducement for prescribing the fentanyl spray to his patients. In addition to the conspiracy, Halley is charged with five counts of receiving kickbacks.

In order to induce providers to prescribe the fentanyl spray to patients, the indictment alleges that the pharmaceutical company in 2012 created a speakers program in which doctors and other providers would be compensated purportedly for providing educational programs concerning the fentanyl spray to other health care providers. In reality, the indictment alleges, the primary purpose of the program was to provide a financial reward to providers who were prescribing large amounts of the fentanyl spray and incentivize those providers to continue to prescribe the fentanyl spray in the future.

The pharmaceutical company funneled substantial sums of money to Halley by paying him for purported speaking programs that Halley provided to other health care professionals concerning the fentanyl spray. This money was paid to Halley to reward him for prescribing the fentanyl spray to his patients, the indictment says, and to incentivize him to continue to prescribe the fentanyl spray to new patients and increase the dosages of the fentanyl spray for existing patients.

Halley was a speaker from April 2013 to August 2017, purportedly giving approximately 27 presentations at various restaurants, doctor’s offices, and pharmacies throughout the state of Missouri. For each of these purported presentations, the pharmaceutical company paid Halley a fee of between $1,500 and $4,700. Halley received approximately $83,135 in compensation and an additional $9,090 in the form of food, travel, and lodging from the pharmaceutical company for purportedly speaking about the fentanyl spray.

Some of the purported speaking programs conducted by Halley were sham programs, the indictment alleges, in which no other medical professionals permitted to prescribe the fentanyl spray were present. Additionally, the pharmaceutical company paid Halley for at least one program that he never conducted. The programs were typically conducted at fine dining restaurants or in medical offices, in which lunch and/or dinner was provided to the attendees. Some of the attendees attended multiple programs.

Halley knew, the indictment says, that the pharmaceutical company would continue to provide him with paid speaking programs if he prescribed a large amount of the fentanyl spray to his patients, which would be paid for by Medicare and insurance companies. At least one sales representative of the pharmaceutical company regularly requested that Halley write more prescriptions for the fentanyl spray and increase dosages for patients already taking the fentanyl spray. Halley agreed to do so and acted upon these requests by prescribing the fentanyl spray to other patients and by increasing dosages on patients already being prescribed the fentanyl spray.

Additional Charges

Halley is further charged, along with Nga (Lily) A. Nguyen, 40, of Springfield, Missouri, and Kimberly G. Hoffer, 47, of Ozark, Missouri with one count of conspiracy to use a registration number issued to another person in connection with the distribution of a controlled substance. Nguyen was a licensed nurse practitioner who was employed by Halley at the clinic in Nixa. Hoffer was employed by Halley as an licensed practical nurse. Halley is charged with three counts of using, or causing to be used, a registration number issued to another person in connection with the distribution of a controlled substance.

The indictment alleges that Halley was regularly absent from his clinic due to his duties with other medical treatment facilities and his participation in the pharmaceutical company’s speakers program. Because of Halley’s regular absences, Halley and his employees established a procedure by which he would pre-sign prescriptions on dates prior to the dates of certain office visits. Halley’s employees, none of whom had a DEA registration number or could legally prescribe the fentanyl spray or other Schedule II controlled substances in the state of Missouri, prepared the prescriptions for certain upcoming office visits for Halley’s signature, and Halley would sign such prescriptions on a date prior to such office visits. Halley’s staff would then conduct the office visit while Halley was out of the office and issue the prescriptions to the patients. Many of these pre-signed prescriptions were for Schedule II controlled substances, including the fentanyl spray. All of these prescriptions listed Halley’s name and DEA registration number.

Halley also pre-signed blank prescriptions and left them in the care of his staff for their use while he was out of the office.

Today’s indictment also contains a forfeiture allegation, which would require Halley to forfeit to the government any property derived from the proceeds of the alleged offenses, including a money judgment of at least $2,401,705. Nguyen and Hoffer also would be required to forfeit to the government any property derived from the proceeds they obtained as a result of their participation in the alleged offenses.

The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorneys Casey Clark and Nhan D. Nguyen. It was investigated by the Department of Health and Human Services, the FBI, and the Drug Enforcement Administration.