When a doctor decides the kind and dosage of medication a patient needs, it is not just guess work. Pharmacogenetic or pharmacogenomic testing makes this process more accurate by identifying genetic variations that affect how an individual metabolizes certain drugs. It helps predict accurate effectiveness and side effects of specific medications. It improves drug or dose selection for 56 common medicines such as proton-pump inhibitors and antidepressants.

Yet, some have managed to turn this medical advance into a criminal enterprise, including five North Texans who now face federal prison.

On Monday, Edwin Chad Isbell, 48, of McKinney, pleaded guilty to conspiracy to commit illegal health care remunerations. According to Jan. 26 news release, Isbell participated in a scheme that included paying and receiving $28 million worth of kickbacks in violation of the Anti-Kickback Statute. He wasn’t alone. Federal officials charged 13 people from three states in December 2019, including three people from Frisco — James J. Walker, Jr. a/k/a Jimmy Walker, Timothy Armstrong and Virginia Blake Herrin — and one from Dallas — Ray W. Ng.

They worked with others to pay and receive kickbacks in exchange for health care business. They specifically focused on pharmacogenetic (PGx) tests. The group worked with the referral of PGx tests to clinical laboratories in Fountain Valley, Irvine and San Diego, CA.

Isbell’s sentencing hearing has not been set yet, says Davilyn Walston, spokesperson at the U.S. Attorney’s Office.

“Kickback schemes are anti-competitive, lead to overutilization and higher program costs, and prioritize profits over patient care,” says Acting United States Attorney Nicholas J. Ganjei. “The payment and receipt of kickbacks related to federal health care programs will not be tolerated in the Eastern District of Texas.”

Anti-Kickback Law

Several federal agencies investigated the case, including the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI Dallas – Frisco Resident Agency. Assistant U.S. Attorneys Nathaniel C. Kummerfeld and L. Frank Coan, Jr prosecuted the case using the Anti-Kickback law.

According to the Jan. 26 press release, the Anti-Kickback law “prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for items or services payable under federal healthcare programs.” Violations of this statute can mean up to five years in federal prison. Additionally, physicians who participate may also face up to $50,000 fine per kickback, plus triple the amount of the remuneration.

For example, the Medicare Fraud Strike Force, a joint initiative between the Department of Justice and the U.S. Department of Health and Human Services, charged six Dallas-area pharmacy owners and marketers last May for their involvement in a kickback scheme. The indictment involved $14.1 million in illegal kickbacks and alleges that those involved used the money to “further enrich themselves and others through the purchase of luxury vehicles and chartered vessels, among other property.”

In August, federal officials charged Vinson Woodlee, owner and president of Med Left in Rockwall, with collecting more than $60 million in healthcare kickbacks. According to the U.S. Attorney’s Office Northern District of Texas, he could face up to 35 years in federal prison.

The Office of Inspector General points out on its website that remuneration can include anything of value. It can also take many forms besides cash such as free rent, expensive hotel stays and meals and excessive compensation for medical directorships or consultancies.

“In some industries, it is acceptable to reward those who refer business to you,” the Inspector says. “However, in the Federal healthcare programs, paying for referrals is a crime.”