The Attorney General’s suit alleges that each of 800 clients referred to IWP without disclosing the financial arrangement involved constituted a separate statutory violation
Injured Workers Pharmacy (IWP), a mail-order pharmacy located in Andover, focused on dispensing a high volume of opioid-based controlled substances primarily to workers who had been injured on the job. In June, IWP signed a consent decree with the Attorney General to pay $11 million to the Commonwealth, with $9 million of $11 million designated as a civil penalty.
Until the Attorney General stepped in, IWP took advantage of the workers compensation insurance prescription system by pressuring pharmacists to dispense prescriptions faster and implemented programs that prioritized dispensing speed and volume over protecting its patients and preventing the diversion of overprescribed drugs into the wrong hands.
Kickbacks to law firm for pushing their injured clients to use IWP for prescriptions
The Attorney General’s complaint against IWP stated that the company had bolstered its sales, in part, by paying referrals to workers’ compensation law firms for the firms pushing their client new patient referrals.
The Attorney General’s complaint against IWP did not identify the law firms involved. The suit only stated that IWP disguised these referral payment arrangements by calling them “marketing agreements” and “sponsorships.”
The Attorney General’s IWP complaint described a “marketing agreement” with an unnamed Massachusetts personal injury and workers’ compensation law firm. In this agreement, IWP agreed to pay $4 thousand per month allegedly for the law firm allowing IWP to place information about its pharmacy services on the law firm’s website. However, internal documents obtained by the Attorney General showed that IWP was paying what the Attorney General characterized as illegal kickbacks for the law firm to push forty of its injured clients a month to get their controlled substance prescriptions fulfilled by IWP.
Attorney General sues the Keches law firm for accepting illegal kickbacks from IWP
The Attorney General identified the law firm that received the $4 thousand per month for referrals to IWP, in a lawsuit filed in Suffolk Superior Court on Friday.
In her lawsuit, Attorney General Healey alleged that Keches Law Group, P.C. (Keches) engaged in unfair and deceptive acts under the state’s consumer protection law by accepting more than $90,000 in kickbacks from IWP in exchange for referring at least 800 injured clients to the pharmacy without disclosing its financial interest in the referrals or obtaining their clients’ informed consent. These payments were made first under a marketing agreement that the complaint alleges was a sham and then under an informal oral arrangement.
After IWP canceled the first agreement for $4 thousand a month, the Attorney General’s complaint alleges that Keches and IWP agreed to a second unwritten arrangement under which IWP agreed to pay for Keches’ social events in exchange for referrals.
According to the complaint, IWP ultimately paid for Keches social events costing more than $74,000, including an X1 racing event, a yacht outing, and a nearly $ 24,000-holiday luncheon. Keches’ referrals under the written 2017 and the unwritten 2018 agreement generated more than $1.2 million in revenue for IWP.
The law firm claims no client injured by the referrals
Keches Law Group, P.C. is a law firm with its principal place of business in Taunton, Massachusetts. Keches has Massachusetts offices in Boston, Fall River, New Bedford, Taunton, and Worcester, as well as offices in New Hampshire and Rhode Island. The firm has almost 50 attorneys who specialize in personal injury cases, including auto accidents, medical malpractice, workers’ compensation, and disability claims. Keches has clients in Massachusetts, New Hampshire, Rhode Island, and Connecticut.
For its part, the Keches firm stated through its legal representative, Thomas F. Maffei, of Sherin and Lodgen LLP, that it had cooperated with the Attorney General’s original investigation into IWP’s business practices and was “surprised and disappointed” by the Attorney General’s lawsuit against the firm. The firm’s statement also claimed, “There was no quid pro quo, and to their knowledge, no client was harmed.”
The Attorney General’s suit seeks injunctive relief, restitution, civil penalties, and attorney fees
The Attorney General’s lawsuit seeks an order from the court permanently enjoining Keches from further violations of the consumer protection law, together with consumer restitution, civil penalties, and attorneys’ fees and costs.
The Attorney General’s suit, under G.L. c. 93A, alleges that each of 800 clients Keches referred to IWP without disclosing the financial arrangement involved constituted a separate statutory violation. Each statutory violation of G.L. c. is subject to a civil penalty of up to $5 thousand.
The Attorney General’s staff handling the suit against Keches
This matter is being handled by Senior Enforcement Counsel Gillian Feiner, Special Assistant Attorney General Matthew Lashof-Sullivan, and Paralegal Philipp Nowak of the Attorney General’s Health Care and Fair Competition Bureau, with assistance from Assistant Attorney General David Kim of the Attorney General’s Administrative Law Division.