DOJ arrests, charges telemental health company leaders

Update 6/14/2024: The Centers for Disease Control and Prevention (CDC) has issued a health advisory warning that patients relying on e-prescriptions of ADHD medications from this company or other similar subscription-based telehealth platforms could experience a disruption in their treatment and access to care following the indictment of Done Health company leaders. The potential disruption coincides with an ongoing prescription drug shortage involving several medications, including Adderall, and could impact as many as 30,000 to 50,000 adult patients nationwide.

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The United States Department of Justice (DOJ) has arrested and charged the CEO and clinical president of telemental health company Done Health for an alleged Adderall distribution and healthcare fraud scheme.

Done Health Founder and CEO Ruthia He and Clinical President David Brody were arrested on June 13 in Los Angeles and San Rafael, California, respectively. According to the DOJ’s allegations, He and Brody conspired with others to provide easy access to Adderall, a medication used to treat attention-deficit/hyperactivity disorder (ADHD), through a monthly subscription fee for Done, a telehealth and e-prescribing platform.

The company leaders allegedly limited the information available to Done prescribers, instructed Done prescribers to prescribe Adderall and other stimulants even if the healthcare consumer did not qualify, and ordered that initial patient encounters be under 30 minutes. The DOJ also claims that He and Brody targeted drug seekers, spending millions on deceptive advertisements on social media.

Further, He allegedly created a compensation structure that paid Done prescribers only for the number of patients who received prescriptions rather than medical visits, telehealth consultations, or time spent caring for patients after an initial consultation. Not only that, but the DOJ also alleges that He established an auto-refill function that allowed refill requests to be auto-generated every month.

“As alleged in the indictment, the defendants provided easy access to Adderall and other stimulants by exploiting telemedicine and spending millions on deceptive advertisements on social media. They generated over $100 million in revenue by arranging for the prescription of over 40 million pills,” said Nicole M. Argentieri, principal deputy assistant attorney general and head of the DOJ’s Criminal Division, in a press release. “These charges are the Justice Department’s first criminal drug distribution prosecutions related to telemedicine prescribing through a digital health company.”

The court documents additionally allege that though He and Brody were made aware of online posts about how to use Done to obtain easy access to Adderall and other stimulants and that Done subscribers had overdosed and died, they continued the scheme.

He, Brody, and others conspired to defraud pharmacies and Medicare, Medicaid, and commercial insurers, the DOJ alleges. The company made false representations about its prescription policies and practices to induce the pharmacies to dispense Adderall and other stimulants, prompting Medicare, Medicaid, and commercial insurers to pay for the drugs. As a result of this scheme, Medicare, Medicaid, and commercial insurers paid more than $14 million.

Finally, the court documents state that He and Brody conspired to obstruct justice by deleting documents and communications after a grand jury subpoena was issued to another telemental health company and failed to produce documents in response to a federal grand jury subpoena issued to Done.

He and Brody each face a maximum penalty of 20 years in prison if convicted.

“As more health care needs are met through telemedicine, we will not tolerate fraud schemes that seek to recklessly exploit digital technologies,” said Honorable Christi A. Grimm of the Department of Health and Human Services Office of the Inspector General (HHS-OIG) in the press release.

The arrests and subsequent charges come about two years after reports that the Drug Enforcement Administration questioned people within Done Health about its prescribing practices. CVS and Walmart also announced in 2022 that they would no longer fill prescriptions for controlled substances provided by Done Health and Cerebral, another telemental health company.

The DEA has made attempts to crack down on the virtual prescribing of controlled substances but faced pushback from the healthcare industry.

In early 2023, the DEA issued a proposed rule that would eliminate pandemic-era flexibilities, allowing clinicians to remotely prescribe Schedule II controlled substances like Adderall, Oxycodone, Vicodin, and Ritalin without a prior in-person exam. After receiving nearly 38,000 comments on the proposal and conducting listening sessions with stakeholders, the DEA extended the flexibility through December 31, 2024.