PHILADELPHIA – U.S. Attorney William M. McSwain announced that the United States filed a civil lawsuit against Andrew M. Berkowitz, M.D., of Huntington Valley, PA, for engaging in healthcare fraud and improperly distributing and dispensing controlled substances. The civil complaint relates to criminal charges that were previously filed against Berkowitz and for which he has pleaded guilty. At the same time the new civil suit was filed, the United States also filed a proposed civil judgment, in which Berkowitz has agreed to pay a total of $2.8 million in civil damages and penalties under the False Claims Act, Controlled Substances Act, and in civil forfeiture, committed to never obtaining another controlled substance registration, and consented to a 20-year exclusion from Medicare and Medicaid. The consent judgment remains subject to court approval.

The civil lawsuit alleges that Berkowitz, through his healthcare practice and employees, developed a scheme where his business dispensed prescription drugs, including controlled substances, to patients in what the staff referred to as “goodie bags.” Berkowitz allegedly dispensed the drugs to every patient whose insurance would cover the drugs he had in stock. The suit alleges that Berkowitz dispensed the drugs for profit without any meaningful assessment of medical necessity or whether the drugs had a legitimate medical purpose. For each “goodie bag” dispensed, Berkowitz allegedly submitted claims for reimbursement falsely asserting that the drugs were medically necessary for the patient. Berkowitz also allegedly prescribed oxycodone to “pill-seeking” patients in exchange for submitting excessive claims to patients’ insurance, including Medicare, for medically unnecessary prescription drugs and for services not rendered. The complaint notes that Berkowitz pleaded guilty to criminal charges on January 24, 2020 and admitted to these facts in court.

Berkowitz agreed to resolve this civil liability under terms outlined in the proposed consent judgment if accepted by the court. Among other things, Berkowitz would pay $2.8 million in civil damages and penalties under the False Claims Act, Controlled Substances Act, and in civil forfeiture, in addition to the $3.5 million he has already agreed to pay in criminal restitution. The proposed resolution would also permanently prevent Berkowitz from prescribing, distributing, or dispensing any controlled substances in the future and prevents Berkowitz from ever seeking another controlled substance registration from the Drug Enforcement Administration. The resolution would also impose a 20-year exclusion on Berkowitz from Medicare and Medicaid.

The civil complaint relates to the criminal charges that were previously filed against Berkowitz. On June 25, 2019, a federal grand jury returned an indictment charging Berkowitz with Health Care Fraud and Distribution of Controlled Substances outside the usual course of professional practice and without a legitimate medical purpose. On January 24, 2020, Berkowitz pleaded guilty to all charges before the Honorable Paul S. Diamond. Describing Berkowitz as a “drug dealer” who committed “prolonged and outrageous dishonesty and fraud,” Judge Diamond revoked bail and remanded him to the custody of the United States Marshal pending sentencing.

 “This civil lawsuit and proposed consent judgment are critical components of ensuring that justice is done in this case,” said U.S. Attorney McSwain. “In addition to criminal charges, this civil resolution makes clear to doctors who dare engage in healthcare fraud and drug diversion that they will be held financially accountable for their illegal conduct. Our office will continue to root out healthcare fraud and drug diversion in the Eastern District of Pennsylvania in all its forms.”

“Andrew Berkowitz pushed unnecessary pills on his patients and doled out opioids to addicts,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “All the while, he was billing Medicare and insurance companies for it and making multiple millions. It’s a gross violation of both medical ethics and federal law. Alongside the criminal case, these civil actions should help hammer home to the medical community that health care fraud is a crime that truly doesn’t pay.”

“Ensuring the integrity of the Medicare and Medicaid program is a top priority,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of the Inspector General. “This settlement holds Berkowitz accountable for his misconduct and will bar him for participating in Medicare and Medicaid programs for 20 years. HHS-OIG and our law enforcement partners will continue to investigate and hold accountable those providers who chose to engage in healthcare fraud and drug diversion.”

The case was investigated by the Federal Bureau of Investigation; the Philadelphia Police Department; the U.S. Department of Health and Human Services – Office of Inspector General; the U.S. Office of Personnel Management – Office of Inspector General; and the U.S. Department of Labor – Office of Inspector General. The civil investigation, litigation, and resolution are being handled by Assistant United States Attorneys Anthony D. Scicchitano and Sarah Grieb. The related criminal charges are being prosecuted by Assistant United States Attorney M. Beth Leahy.

The amended complaint contains allegations only; except for what has been admitted in the criminal proceeding, there has been no admissions. The proposed consent judgment would resolve any alleged civil liability.

PHILADELPHIA – United States Attorney William M. McSwain announced that Andrew M. Berkowitz, M.D., 60, of Huntington Valley, PA, was charged by Indictment with 19 counts of health care fraud, and 23 counts of distributing oxycodone outside the course of professional practice and without a legitimate medical purpose.

According to the Indictment, Berkowitz operated a medical practice in Philadelphia under the name ‘A+ Pain Management’, and through this practice Berkowitz fraudulently billed insurers for medically unnecessary physical therapy, acupuncture, chiropractic adjustments, and prescriptions drugs – and sometimes for treatments not provided at all.

Regardless of their individual  complaint, at every visit A+ patients received a “goodie bag” which was a tote bag filled with prescription drugs for which Berkowitz submitted pharmacy claims through his company, Bucks Philadelphia Medical Care Group. The “goodie bags” typically included a combination of drugs such as Topical Analgesics, such as Relyyt and/or Lidocaine; Muscle Relaxers, such as Chloroxazon and/or Cyclobenzaprine; Anti-Inflammatories, such as Celecoxib and/or Nalfon; and Schedule IV controlled substances, such as Tramadol for pain; and/or Eszopiclone and Quazepam for insomnia and anxiety. Berkowitz obtained payments from insurers of more than $4,000 for each bag by falsely asserting that the drugs were for the benefit of the patient when, in reality, Berkowitz was the real beneficiary.

The Indictment also alleges that Berkowitz would prescribe Oxycodone to “pill-seeking” patients in exchange for their tacit approval that he would submit excessive claims to the patients’ insurers for the “goodie bag” and other medically unnecessary services. For 2015 through 2018, Berkowitz obtained an estimated $3.2 million in fraudulent proceeds from his “goodie bag” scheme.  

In addition to the criminal charges, the Affirmative Civil Enforcement (ACE) Strike Force of the U.S. Attorney’s Office also filed a civil suit for an injunction to stop any future healthcare fraud and to freeze much of the defendant’s assets pending the criminal and civil investigations. The court granted the government’s request and entered a temporary restraining order against the defendants pending additional proceedings.

“The U.S. Attorney's Office is committed to bringing all of our enforcement tools to bear against healthcare fraud and drug diversion,” said U.S. Attorney McSwain.  “Today's case is the latest example of our Criminal Division working in tandem with our ACE Strike Force to pursue fraud and diversion that allegedly put dangerous and addictive pills onto the street in the midst of the ongoing opioid epidemic.” 

“Again and again, we're seeing these doctors with dollar signs in their eyes, willing to abandon all pretense of professional ethics,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “As alleged, Berkowitz made millions by diverting dangerous drugs to anyone who wanted them, with Medicare — and ultimately, American taxpayers — picking up the tab. The FBI, with the Philadelphia Police and our federal partners are doggedly working to put medical professionals engaged in this kind of fraud out of business.”

If convicted, the defendant faces a maximum possible sentence of 660 years in prison.

The case was investigated by the Federal Bureau of Investigation; the Philadelphia Police Department, Health and Human Services – Office of Inspector General, Office of Personnel Management – Office of Inspector General, and Department of Labor – Office of Inspector General, and is being prosecuted by Assistant United States Attorney M. Beth Leahy. The civil action is being handled by Assistant United States Attorney Anthony Scicchitano.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.