Chester County Doctor Agrees to Pay Over $1.2 Million to Settle Allegations of Fraudulent Billing and Unlawful Opioid Distribution

PHILADELPHIA— United States Attorney William M. McSwain announced that Thomas J. Whalen, D.O., 65, of Berwyn, PA, has agreed to pay the United States $1,257,499.00 to resolve allegations under the False Claims Act that he submitted or caused the submission of false claims to federal health care plans for FDA-approved versions of Remicade, Orencia, Prolia/Xgeva, Synvisc/Synvisc One, and Boniva when he had, in fact, administered non-FDA-approved, foreign versions of these medications.

In addition, the civil settlement resolves admissions that Whalen knowingly and intentionally prescribed controlled substances outside the usual course of professional practice and without a legitimate medical purpose, in violation of the Controlled Substances Act. Whalen permanently surrendered his controlled substance registrations with the DEA, surrendered his medical license, and will be excluded from participation in federal programs.

Whalen owned and operated Rheumatology Consultants, P.C., doing business as Whalen Rheumatology Group, with locations in Havertown, PA, Exton, PA, and Wilmington, DE. As part of his practice, Whalen used medications administrated by injection and infusion to treat his patients. These medications, including Remicade Synvisc, Synvisc-One, Orencia, Prolia/Xgeva, and Boniva, are made of living cells and are expensive. Rather than purchase FDA-approved versions of these medicines from authorized distributors, Whalen devised a scheme to purchase much cheaper foreign, non-FDA-approved versions of these medications. Unbeknownst to his patients, Whalen injected or infused them with the non-FDA-approved medications and then billed health care programs as if he had used the approved medications and pocketed approximately $1.1 million in illicit gains.

Whalen also prescribed oxycodone to patients abusing illicit drugs. Whalen admitted to unlawful distribution of a controlled substance to two of his patients to whom he prescribed oxycodone, despite receiving multiple urine drug screening results for each that revealed the patients simultaneously abused cocaine and heroin.

In December 2019, Whalen also pleaded guilty before United States District Court Judge Timothy J. Savage to related criminal charges of one count of health care fraud, one count of importation contrary to law, and two counts of distributing and dispensing oxycodone outside the course of professional practice and not for a legitimate medical purpose. He was sentenced this week to one day incarceration, followed by 12 months home confinement, three years supervised release and a $25,000 fine.

“Whalen prioritized lining his own pockets over his patient’s safety,” said U.S. Attorney McSwain. “By duping his patients and health care programs alike, he stole more than $1.1 million. On top of that, he also unlawfully distributed oxycodone to patients he knew were using cocaine and heroin. These are egregious, inexcusable violations of the trust that was placed in him as a medical professional.”

Regarding the resolution of the civil suit allegations, U.S. Attorney McSwain also stated: “This settlement illustrates my Office’s dedication to ensuring that physicians who engage in submission of false claims and the illegal distribution of opioids and other controlled substances are held accountable with all of our civil enforcement tools, as well as our criminal tools. My Office’s Health Care Fraud Strike Force, Civil Division, and Forfeiture staff continue to aggressively investigate doctors who violate their duties, so that we can deter and punish illegal opioid prescribing and health care fraud.”

“Dr. Whalen administered non-FDA approved drugs, which placed patients’ health at risk” said Special Agent in Charge Maureen Dixon of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Philadelphia Office. “Such medications are not paid for by Medicare due to the risk they may pose to patient health. HHS-OIG, along with our law enforcement partners, will continue to protect the public and root out dangerous and costly fraud schemes.”

“Dr. Whalen dispensed oxycodone, a highly addictive controlled substance medication, to individuals who he knew were already abusing cocaine and heroin. He did so without first establishing a professional doctor-patient relationship with these individuals and dispensed the oxycodone to them without any legitimate medical purpose. Instead of using his professional standing to help these individuals addicted to illicit street drugs, Dr. Whalen used his medical license to harm them in the name of making money, ” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Whalen’s crimes enabled his patients’ substance use disorder rather than treating it appropriately.”

“The opioid epidemic that continues to spread across our nation is fueled by the illegal procurement and distribution of drugs such as OxyContin,” said Norbert E. Vint, Deputy Inspector General Performing the Duties of the Inspector General, OPM OIG. “Dr. Whalen’s scheme not only defrauded the federal health insurance carriers, but also put patients at grave risk through his unlawful distribution of controlled substances for no legitimate medical purpose. This guilty plea and settlement sends a clear message to those engaged in fraudulent conduct contributing to the opioid crisis that we will hold providers accountable. I applaud the hard work of our investigative staff and our law enforcement partners.”

“U.S. consumers rely on FDA oversight to ensure that the drugs they receive are safe and effective. Rogue health care professionals who obtain foreign unapproved medicines and then dispense and administer those drugs to their patients, put the health of those patients at significant risk,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations Metro Washington Field Office. “We will continue to pursue and bring to justice those who choose to put the public’s health at such risk.”

The U.S. Department of Health and Human Services, Office of Inspector General; the Drug Enforcement Administration; Homeland Security Investigations; the Food and Drug Administration, Office of Criminal Investigations; the Office of Personnel Management, Office of Inspector General; and the Federal Bureau of Investigation all investigated the case. Trial Attorney Debra Jaroslawicz with the Criminal Division’s Fraud Section and Assistant United States Attorney Paul J. Koob prosecuted the criminal case. Assistant United States Attorney and Deputy Chief Charlene Keller Fullmer handled the civil case.