Memorial Compounding Pharmacy Owner, Khyati Undavia, and Others Charged with Violations of Federal Anti-kickback Statutes
On July 9, 2021, having received a waiver of indictment, the federal government filed its Information on Khyati Undavia, as owner/administrator of Minu Rx LTD, Plaza Medical Center Pharmacy/DBA: Memorial Compounding Pharmacy (“Memorial”). Ms. Undavia was charged with submitting claims for compound medication prescriptions purportedly written by the co-conspirator doctors. Between December 2012 and December 2018, Undavia hired the named “marketers” and others to induce physicians to submit compound drug prescriptions to Memorial. Directly and indirectly through the marketers and other methods, Undavia caused kickbacks to be paid to the physicians.
At various times Undavia is charged with paying $44,000 in kickbacks to co-conspirators.
Named Co-Conspirators are:
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- Unnamed Physician #1;
- Grigoriy Rodonaia, M.D. (currently serving 84 months in federal prison);
- Deepak Chavda, M.D. and Jerry Keepers, M.D. (indicted in a separate proceeding, continued to unknown date from last trial date of 10/18/21);
- Joseph Perez, Tres Boyd, Fred Woodson, Christopher Quintana, and Cesar Cuevas (“marketers” paid by Undavia for arranging illicit kickback agreements between the physicians and Memorial).
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Rather than providing the prescriptions to the patient to select their own pharmacy, the bribed physicians sent the prescriptions directly to Memorial. In some instances, the patients had not been seen by the physician. Instead, the marketer would often, without the patients’ knowledge, obtain the personal identifying information of the patient for Memorial, and the doctor would authorize the prescription. The creams would be mailed to the patient whether they wanted them or needed them.
Undavia is charged with creating sham business and “consulting” arrangements with the doctors to disguise the kickbacks. In 2015, Undavia abandoned payments directly to the doctors and their sham companies, instead laundering the payments through the “Undavia Foundation”, purportedly for research in compound creams…research that did not exist.
These federal charges relate only to bills submitted to federal programs, including TRICARE, DOL-OWCP and CHAMPVA. Over various time periods, Memorial was paid over $20,000,000 for the compound creams. The government has declared a right of forfeiture of property for at least that amount.
No state workers’ compensation claims are the subject of this federal prosecution. But, Memorial also charged Texas workers’ compensation carriers and self-insureds for these same compound creams, using the same method of receiving the prescription directly from the doctor, and mailing the creams to the injured worker.
Many carriers denied the bills for lack of preauthorization, but the Division Medical Fee Dispute Resolution department routinely ordered payment, concluding the creams did not require preauthorization. FOL successfully obtained reversal at SOAH on the basis the creams were experimental or investigational, requiring preauthorization. Some of those appeals by carriers are still pending at SOAH, and some appeals by Memorial are pending in state district court.
To no one’s surprise, once the Division added compound drugs to the list of services requiring preauthorization, neither the doctors involved nor Memorial requested preauthorization. Anticipating the obvious outcome of any preauthorization request, this flow of compound creams came an abrupt halt.
Current court records show the existence of a sealed Plea Agreement, with Undavia’s sentencing by United States District Judge Andrew S. Hanen now set for January 31, 2022.
FOLIO
