The trial began Monday for an Ocean Springs doctor charged with 16 counts in connection to a scheme officials say defrauded TRICARE and other health care providers by prescribing medically unnecessary compounds.
Dr. Albert Diaz allegedly wrote prescriptions without examining patients and had the prescriptions filled by Hattiesburg-based Advantage Pharmacy for nearly $3.4 million between March 2011 and March 2015. More than $2.3 million of that money was reimbursed to the pharmacy by TRICARE, a health care benefit program for the military, veterans and their family members.
Diaz also allegedly submitted false patient records for an audit for TRICARE and indicated he had examined his patients before prescribing them compounded medications.
Compounded drugs are the mixture of two or more drugs by a pharmacist to meet a patient’s specific needs.
Diaz, an obstetrician and gynecologist who practices in Biloxi, was indicted in October.
Even though OB-GYN doctors specialize in treating female patients, Diaz allegedly wrote prescriptions for compounded pain creams and pills to several male patients.
Diaz’s attorney John Collette in his opening statement said Diaz did not write the prescriptions, nor did he profit from them.
“You’re going to see money all over the place,” Collette told the jury. “But what you won’t see is one dime going to (Diaz).
“I don’t believe there will be any proof Dr. Diaz did any of it.”
The only witness to testify Monday was Jason May, who pleaded guilty in July to conspiracy to commit health care fraud and money laundering of around $190 million.
May was the pharmacist in charge at Advantage Pharmacy in Hattiesburg from December 2011 to January 2016, when federal agents searched the facility and took documents, computers and other materials, forcing the pharmacy to close.
Co-defendant Jay Schaar of Biloxi also pleaded guilty to conspiracy to commit health care fraud. He is expected to testify later this week.
May identified around 100 vials of compounded creams and pills as those prescribed by Diaz to several patients, including multiple family members.
He testified the creams, used for treating chronic pain, were created to derive the maximum reimbursement value and were not tested for medicinal value.
“They were made largely based on retail value and profitability,” May said.
Some of the creams included ketamine, a controlled substance. Others included ingredients that could be purchased separately over the counter.
One prescription’s reimbursement value was around $13,580. Others ranged from $690 to $5,800.
May said the pharmacy sometimes decreased the copay to keep patients from canceling their prescriptions.
May will retake the witness stand Tuesday morning in U.S. District Court in Hattiesburg for cross-examination. Other witnesses expected to testify Tuesday are two of the patients who allegedly were prescribed some of the high-cost compounded medicines.
If convicted, Diaz faces up to 305 years in prison and fines of up to $7.5 million.
Also indicted is a nurse practitioner, Susan Perry of Grand Bay, Alabama, who operated Immediate Family Clinic in Biloxi. Her trial is set to begin in Hattiesburg during the court term beginning April 16.