On January 11, 2024, two doctors from St. Louis, Missouri, Dr. Asim Muhammad Ali and Dr. Mohd Azfar Malik, were charged with 22 felony counts for illegally administering ketamine to patients and fraudulently billing Medicare for services related to a psychiatric clinic.

According to the indictment, Dr. Ali (1) illegally administered intravenous and nasal spray ketamine without authorization; (2) defrauded Medicare by falsely using Dr. Malik’s name and Medicare billing number to bill for health care services; and (3) unlawfully stored ketamine and esketamine with the aid of Dr. Malik.

The Background

Dr. Malik, a psychiatrist, was involved in several businesses. He formed COPE Ketamine Clinic in South St. Louis County to provide intravenous ketamine infusions for serious mental health illnesses. While Dr. Malik had a DEA registration which authorized him to administer controlled substances, the authorization was not for his office suite housing COPE. Dr. Malik was also enrolled in the Spravato Risk Evaluation and Mitigation Strategy (“REMS”) Program which authorized him to administer the prescription esketamine nasal spray Spravato. Due to the risks of the drug, Spravato is only available through REMS and must be administered under the direct supervision of a healthcare provider that is onsite for at least two hours to monitor patients.

Dr. Ali, on the other hand, did not have a DEA registration and was not authorized to administer ketamine unless under the direct supervision and in the physical presence of a practitioner with a DEA registration at a DEA-registered location.

The Arrangement

According to the indictment, Dr. Malik and Dr. Ali developed an arrangement in late 2020 pursuant to which Dr. Ali would use Dr. Malik’s DEA registration to administer ketamine infusions without direct supervision by, and outside the physical presence of, Dr. Malik. Investigations also revealed that Dr. Ali had been suspended from participation in the Missouri Medicaid program in December 2020 but failed to report that to Medicare and continued to provide services to Medicare beneficiaries through Dr. Malik’s businesses.

The Result

Dr. Ali and Dr. Malik were each indicted on 22 felony counts for the following:

• • Conspiracy to illegally distribute controlled substances and to maintain a drug-involved premises, which carries a possible penalty of up to 10 years in prison and a fine.
  • Conspiracy to commit health law fraud, which carries a possible penalty of up to 10 years in prison and a fine.
  • Illegal distribution of a controlled substance, which carries a penalty of up to 10 years in prison and/or a $500,000 fine.
  • Making false statements related to health care matters, which carries a penalty of up to 5 years in prison and/or a $250,000 fine.
  • Maintaining a drug-involved premises, which carries a penalty of up to 20 years in prison and/or a $500,000 fine.

While these charges are accusations and not a verdict, this case serves as a stark reminder to all health care professionals of the duty to bill for services and prescribe controlled substances responsibly and in accordance with applicable law.

If you have any questions regarding the administration of ketamine under applicable laws and regulations, please feel free to contact Bill Kalogredis, Esq. or Sonal Parekh, Esq.

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Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, and other healthcare professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is Chairman of Lamb McErlane PC’s Health Law Department. Bill can be reached by email at bkalogredis@lambmcerlane.com or by phone at 610-701-4402.

Sonal Parekh, Esq., is an associate at Lamb McErlane PC who focuses on healthcare transactional matters and a broad range of healthcare regulatory-related issues on behalf of healthcare systems, physicians, dentists, and other healthcare providers, and is a pharmacist by education and training. Sonal can be reached by email at sparekh@lambmcerlane.com or by phone at 610-701-4416.

*This alert is for educational purposes only and is not intended to be legal advice. Should you require legal advice on this topic or have any questions or concerns, please contact Vasilios J. (Bill) Kalogredis, Esq. or Sonal Parekh, Esq.