Texas Orthopedic Surgeon to Pay $300,000 to Settle False Claims Act Allegations

Dr. Ian Reynolds, 71, of Friendswood, Texas, agreed to pay the United States $300,000 to resolve False Claims Act allegations that he accepted illegal kickback payments from OK Compounding, LLC, announced U.S. Attorney Trent Shores. This is the twelfth kickback settlement involving OK Compounding, LLC, since November 2018.

“Thanks to the work of the U.S. Attorney’s Office Affirmative Civil Enforcement team, taxpayer dollars that should have gone to fund federal insurance programs have been recovered from a corrupted doctor who wrote prescriptions to a specific pharmacy in exchange for kickbacks,” said U.S. Attorney Trent Shores. “Unethical healthcare professionals will be held accountable when they violate rules intended to safeguard the integrity of our federal health care system. Doctors and pharmacists are on notice that there will be consequences if they abandon patient centered care in exchange for kickbacks that line their pockets.”

This civil settlement resulted from an investigation into numerous health care providers writing prescriptions for pain creams compounded and sold by OK Compounding in return for the kickback payments.

From April 2013 through September 2015, Dr. Reynolds prescribed pain creams to his patients, facilitating the sale and distribution of the creams. As compensation for his services, OK Compounding paid Dr. Reynolds what was characterized by the parties as “medical director fees” based upon an hourly rate; however, the payments Dr. Reynolds received from OK Compounding were, in actuality, “kickbacks.”  Because some of the patients were federally insured by Medicare, TRICARE, the Veterans Health Administration and the Federal Employees Compensation Act Program (FECA), the kickbacks were in violation of the False Claims Act.

It is illegal to pay or receive “kickbacks” in conjunction with federal health care insurance.  Prohibitions against kickbacks are crucial to insure that financial motives do not undermine the medical judgment of physicians and other health care providers.  The civil False Claims Act is an important tool used to protect the integrity of taxpayer-funded health care programs.

To report fraud and abuse against the Federal government in the Northern District of Oklahoma, please contact the U.S. Attorney’s Office at 918-382-2700 and speak to a member of the ACE Unit.

This matter was handled by Assistant U.S. Attorney Kristin Harrington, and is the product of a collaborative investigation by the Defense Criminal Investigative Service, Department of Labor–Office of Inspector General (OIG), IRS–Criminal Investigation Division, U.S. Postal Service–OIG, FBI, Department of Veterans Affairs–OIG and the Department of Health and Human Services–OIG.

The claims resolved by the settlement are allegations only; there has been no determination of liability.