About 50,000 U.S. patients' access to attention-deficit/hyperactivity disorder treatment could be disrupted after two executives at Done, a California-based telehealth company, were charged Thursday with healthcare fraud, federal officials said. .
The Justice Department alleges that CEO Ruthia He and the company's clinical president, David Brody, planned to provide easy access to Adderall and other stimulants to patients who didn't need them, and then billed insurance companies for the medicine.
Done's representatives did not immediately respond to a request for comment Thursday.
He and Brody face charges including conspiracy to distribute controlled substances, distribution of controlled substances, conspiracy to commit health care fraud and conspiracy to obstruct justice, court records show.
The charges mark the first time the Justice Department has prosecuted a digital health company in connection with the distribution of controlled substances via telemedicine.
San Francisco-based Done operated a subscription model in which people paid a monthly fee in exchange for an online diagnosis of ADHD, as well as subsequent treatment and medication refills.
Prosecutors allege that He and Brody arranged the prescription of more than 40 million pills, including Adderall, and generated more than $100 million in revenue since the beginning of the COVID-19 pandemic.
The charges coincide with an ongoing shortage of several stimulant medications commonly prescribed to treat ADHD, according to the U.S. Centers for Disease Control and Prevention. An outage “involving this large telehealth company could affect between 30,000 and 50,000 patients ages 18 and older in all 50 U.S. states,” the agency said.
“Instead of adequately addressing medical needs, the defendants allegedly made millions of dollars selling addictive medications,” said Anne Milgram, administrator of the U.S. Drug Enforcement Administration. “Any diversion of Adderall and other prescription stimulant pills to people who have no medical need only exacerbates these shortages and harms any American who has a legitimate medical need for these medications.”
During the pandemic, the federal government expanded telemedicine rules to allow practitioners to prescribe controlled substances to patients virtually. Advocates say the flexibility allowed patients to continue receiving medical care at a time when in-person gatherings risked exposure to COVID-19. However, it also raised concerns that web platforms made it too easy to obtain potentially addictive medications.
In some cases, prosecutors allege, medical providers paid by Done based their diagnoses and prescriptions on a short video or phone conversation and used “limited patient intake documents.” Other times, they prescribed without a video or phone call with the patient, according to the indictment.
Prosecutors also allege that the company instituted an “auto-refill” policy that discouraged providers from following up with patients. They paid medical professionals solely based on the number of patients they prescribed for each month and refused to compensate them for follow-ups or other medical services provided after an initial consultation, according to the indictment.
The company also allegedly collected insurance information from individuals and sent it to the pharmacies that filled the prescriptions, causing the pharmacies to submit “fraudulent claims” to insurance companies. Medicare, Medicaid and commercial insurers ultimately paid approximately $14 million, prosecutors wrote in the indictment.
Officials allege Done knew that some patients had overdosed and died from medications prescribed through his service. Done members described the company as a “pill mill” and a “drug scam to sell ADHD medications and make a lot” of money, according to the indictment.
In May 2022, after mental health startup Cerebral received a grand jury subpoena indicating that it was being investigated, he and Brody were reportedly concerned that they could be the subject of a similar investigation. Prosecutors said they destroyed and concealed records and documents that could have been used by federal law enforcement investigators and began using encrypted messaging platforms instead of company email.
He and Brody were taken into custody and were expected to appear in court Thursday, records show. If convicted, they could face up to 20 years in prison.
The CDC has advised patients who are using telehealth services and are running out of their current prescriptions to schedule an appointment with a healthcare provider as soon as possible.
