Feds: Mich. doctor ran $8M cream scam by ripping off UAW members

A Michigan doctor and two associates are facing years in prison after admitting to running an $8 million scam that involved stealing from UAW members' insurance plans to bill for unnecessary scar creams, pain patches and vitamins.

The scheme worked, prosecutors said, by conning UAW members into thinking the prescriptions were free — meaning no co-pay at the pharmacy — when in reality the  "free" medications were costing their health care fund millions of dollars.

The doctor and her cohorts admitted to all of this in separate plea hearings, the U.S. Attorney's Office announced on Wednesday, noting the scheme bilked nearly $8 million from Medicare and Blue Cross Blue Shield of Michigan.

According to prosecutors, the defendants targeted these insurance plans because of the high reimbursement rate paid by Medicare and BCBS for prescription pain cream, scar cream, pain patches and/or vitamins. 

Here's how they pulled it off: One of the defendants had acquaintances and personal contacts at the UAW through his job and various family members. The three defendants would then schedule time at various UAW meetings, where they would tout pain cream, scar cream, pain patches and vitamins to the UAW members. 

The defendants would then collect the UAW members’ insurance information, along with their family members’ insurance information. The doctor would then write the pain and scar cream prescriptions for UAW members and their family members, even though she had no valid doctor-patient relationship with any of the UAW members, nor did she perform a physical exam.

This was all part of a shakedown, federal prosecutors said, noting the defendants admitted to it after getting ensnared in a health care fraud investigation that ended with this month's plea deals.

• Dr. April Tyler of Fenton, pleaded guilty to violating the anti-kickback statute on Nov. 6 and faces 18-24 months in prison when she is sentenced. As part of her plea deal, she agreed to those sentencing guidelines.

• Jeffrey Fillmore,  31, of Clio, pleaded guilty to health care fraud on Nov. 19 and faces 37-46 months in prison under the terms of his plea deal.

• Patrick Wittbrodt, 44, of Grand Blanc, pleaded guilty to health care fraud in March and faces 70-87 months in prison under his plea deal.

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Tyler also pre-signed prescription forms and allowed her cohorts to choose which compounded creams, patches and vitamins to write on the prescriptions. Pharmacies would then fill the prescriptions, bill the UAW members’ insurance and pay a monetary kickback to Wittbrodt.

Wittbrodt would then divvy up the kickbacks  with Tyler and Fillmore.

According to the U.S. Attorney's Office, the prescriptions were periodically refilled and/or re-billed, regardless of whether the UAW member requested a refill or not. The prescription co-pay was waived at the pharmacy for the UAW members.

“These unlawful prescriptions cost the UAW health care fund millions of dollars, and the end result was a rip-off of the hardworking men and women of the union,” U.S. Attorney Matthew Schneider said in announcing the guilty pleas. “We will continue to aggressively prosecute health care fraud, and step in to protect UAW workers across Michigan.”

Contact Tresa Baldas: tbaldas@freepress.com